Page 234 - Contributed Paper Session (CPS) - Volume 8

CPS2265 Siti Salwani Ismail et al.
buildings to purchase of raw land and the sale of developed land or parcels to
others. Thus, the performance of the property developers in this study will be
evaluated based on the gross output generated by their establishments.

2. Objectives
The objectives of this study are:
i) To investigate the economic variables that affects the value of gross
output of real estate subsector in Malaysia.
ii) To identify the relationship between output of real estate subsector
and economic variables.

3. Literature Review
Gross output by industry provides important insights into an industry’s
contribution to the overall economy. Gross output is principally a measure of
sales or revenue from production for most industries (SNA, 2008). The value
of gross output for the real estate subsector is defined to include commissions
and brokerage received on sales from land, residential, non-residential and
other properties; commissions and brokerage received on rental/lease
transaction from land, residential, non-residential and other properties; rental
income received from land, residential, non-residential and other properties;
sale income received from land, residential, non-residential and other
properties; income received from valuers / appraiser of real estate; income
received from property management; income received from management
services and other income (DOSM, 2016).
According to Wilkinson, S. J. (2008), property development is an exciting
and occasionally frustrating, increasingly complex activity involving the use of
scarce resources. It is a high-risk activity that often involves large sums of
money tied up in the production process, providing a product that is relatively
inseparable and illiquid.
The sales of Malaysia's property are driven by various factors. Chia, J (2016)
identified five variables which were found to be significant and have positive
relationships with house purchase intention. Their findings showed that
financing, distance, superstition numbers, environment and house features
were important attributes to house buyers when they purchase a house. While
according to Sean, S. L., & Hong, T. T. (2014). location, financial and structural
factors prove to be significant at 5% with p-value of 0.026, 0.011 and 0.024,
respectively as the factors taken into the consideration in acquiring residential
properties.
From January to May 2017, commercial banks approved over RM25.7
billion and disbursed more than RM24.6 billion in loans for the purchase of
residential property. Housing loans formed the single largest component of
commercial banks’ total loan portfolio, representing 34.4% of the total

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