Page 233 - Contributed Paper Session (CPS) - Volume 8

CPS2265 Siti Salwani Ismail et al.

Factors affecting the gross output value of real
estate subsector in Malaysia
1
1
Siti Salwani Ismail , Wan Rahifah Wan Ramli , Mohamad Helmi Hidthiir
2
1 Department of Statistics, Malaysia
2 Universiti Utara Malaysia

Abstract
The thriving of high-value projects would continue to catalyse property
business activities in Malaysia and bring about new growth drivers and
opportunities. There are expectations that the real estate subsector to boom
at the end of 2018 as a spill over from this robust economic expansion. This
development would be desirable but still with uncertainties as there are many
factors contributing to the growth in the real estate subsector. Therefore, the
aim of the paper is to study the factors that affecting the gross output value
of real estate subsector in Malaysia from year 2010 to 2015. This study only
focused on three factors namely value of loan applied, base lending rate and
average house price as independent variables. Linear regression is used to
determine the relationship between the variables. Granger causality test is
employed to investigate the causality between economic variables and output
of real estate subsector. Based on the findings of the study, loan approved and
base lending rate has negative effect to dependent variable. While, average
price house was positive effect with dependent variable of this study. The
output of real estate subsector was granger cause to base lending rate.

Keywords
real estate subsector, gross output and regression analysis

1. Introduction
The real estate subsector is one of the main drivers of Malaysia economic
growth. This subsector is expected to remain its steady growth driven by the
implementation of various projects under the Economic Transformation
Program (ETP), the 2013 Budget and the Tenth Malaysia Plan (RMK-10). In
2015, the real estate subsector contributed 1.4 per cent to the total gross
domestic product (GDP) and 2.7 per cent to the total of services sectors.
Meanwhile, value of gross output generated for these services amounted to
RM28.1 billion. Within the period of 2010 and 2015, there was an increase of
RM9.4 billion registering a CAGR of 8.5 per cent.
The business main enabler in the real estate subsector are the real estate
developers. Generally, these real estate developers or property developer,
involve in the activities encompassing from renovation and re-lease of existing

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