Determinants of homeownership in Malaysia

The housing industry is crucial to the sustainable development in Malaysia. The efficiency and effectiveness of the housing delivery system requires housing provision for all. The housing industry, which had grown rapidly in the 1980s encountered property oversupply recently. The majority of these units remain unsold for reasons beyond price factor, ranging from poor location to unattractive houses. The main objective of this paper is to tackle property oversupply in the country by examining a detailed knowledge of home owning determinants. Homeownership should be encouraged as positive externalities of homeownership can be found in many housing surveys. Homeownership is a complex issue that is the result of many determinants, including housing characteristics (house types and property types), employment and income trends, socio-cultural and demographic descriptors. In addition to determinants, efforts needed to reduce regulatory barriers in the housing delivery system that can significantly increase the cost of producing houses. The government should make home financing more available and affordable by providing subsidies to low income families and creating incentives to save for homeownership. Efforts also needed to extend opportunities to enhance the affordability of homeownership by liberalizing rules and regulation of Employee Provident Fund (EPF) withdrawal.