Introduction:
This article elaborates the several factors affecting the housing and property in the markets of Malaysia. The international credit agency has given focus on this housing and property markets in relation to the forces of demand and supply in their economy. The rise in the prices of property has attracted great concern since they have a great impact in the economy of Malaysia. It is therefore necessary to emphasis and focus on this issue in order to consider the general impact on the economy as well as how to curb this problem using various economic means and tools.
The article shows the various efforts made by the Malaysian government to soften the problem by application of various economic tools and policies. (Hilbers, 2001:18) This has shown the improvements made with the use of such policies. This entailed the analysis of the forces of demand and supply of the aggregate market in order to measure the impact such spiraling prices in Malaysian economy.
Economic Analysis:
Aggregate Demand and Aggregate Supply:
In relation to aggregate demand and supply, the analysis of prices of the housing and property sector have been analyzed in order to determine the equilibrium in the market in order to apply appropriate strategic measures to control the prices in the economy. It therefore calls for the appropriate price mechanisms policy using the equilibrium system in order to use the price ceilings and price floors in order to curb this problem. (Horder, 2007:23) The prices of households have been given focus such that the shortages and surpluses are noted in order to create a balance in the markets both in the residential and commercial houses. The rental prices are of essence in the analysis determination of the demand and supply forces in order to ensure that the prices are controlled as well as smoothening the effect or pinch on both the owners of the houses and those renting the premises.
The law of demand and supply tend to have a more severe impact on the housing markets when the supply is low and the demand is high. The government therefore takes measures at this point in order to reduce the pinch in the housing sector. This is manly meant to enable the citizens of Malaysia to afford the prices of housing facilities and the properties in the economy. (Parker, 2006:32)
Fiscal Policies:
In relation to the use of fiscal policies, they have been used as the constructive tools to achieve success in controlling prices in the housing and property markets. The regulation of the banking sector by the government is an important tool in controlling the credit and lending transactions with the real estate as well as rentals in Malaysia.
The government has also intervened with use of fiscal policies in controlling the prices in the housing and property markets. This entails the measures taken with regards to taxes in order to reduce the impact of the hiking prices in the economy. The government has imposed favorable tax policies in the real estate markets in order to ensure that the customers are protected from the exploitation by the owners of the premises.(Parker,2006:43).The government has also put focus on the controlling the lending and credit policies in relation to the housing facilities and properties in order to control the flow of money into this real estate markets as a measure of curbing the overall effect of inflation in the economy.
Conclusion and suggestions:
In conclusion, the Malaysian government has applied both the market forces and fiscal policies in controlling the prices in the real estate market especially in relation to housing facilities and properties. These policies have therefore resulted in the effective solution by moderating as well as reducing the effects of the skyrocketing prices in the housing and property markets.
The government of Malaysia has therefore put measures in place to improve the affordability of the housing facility in Malaysia. It has therefore put measures in place to ensure the quality of the housing facility with respect to price consideration.
References
Hilbers, P. L., Hilbers, P. L., Zacho, L., Lei, Q., & International Monetary Fund (2001). Real Estate Market Developments and Financal Sector Soundness. Washington, D.C: International Monetary Fund.
Horder, J., & Hughes, D. (2007). European Land Law. Hart Publishing.
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Parker, P. M. (2006). 2007-2012 world outlook for real estate services excluding lessors of real estate and offices of real estate agents and brokers, the. ICON Group.
Parker, P. M. (2006). The 2007-2012 world outlook for real estate investment trusts. San Diego, CA: ICON Group.
Qatar Financial Centre (2009). Qfinance: The ultimate resource. London: Bloomsbury.
