Housing price dynamics in Malaysia and Singapore: evidence from an ARDL approach
Ka Yi Sim & Cameron Tan
Abstract
Purpose This study aims to investigate the macroeconomic determinants that influence housing prices in Malaysia and Singapore, two Southeast Asian economies with distinct policy frameworks and housing market characteristics. The research seeks to identify both short-run and long-run dynamics that shape housing market behaviour and to provide comparative insights for policymakers and investors. Design/methodology/approach Quarterly time-series data from 2000 to 2024 are analysed using the Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration and the error correction model (ECM). The Granger causality test is used to determine the direction of relationships among variables. Housing price index (HPI) serves as the dependent variable, while gross domestic product (GDP), inflation (CPI), interest rate, unemployment rate and money supply (M3) act as the explanatory variables. Findings The empirical results indicate that both economies exhibit long-run cointegration among housing prices and the selected macroeconomic variables. Money supply and GDP growth emerge as dominant long-run drivers in both countries, while inflation and interest rates show mixed short-run effects. Singapore demonstrates a stronger feedback mechanism between housing prices and macroeconomic indicators, whereas Malaysia’s housing market appears more sensitive to monetary expansion and inflationary pressures. Research limitations/implications The findings highlight the need for coherent macroeconomic and housing policies. For Malaysia, stabilising money supply growth and enhancing income dynamics are vital to moderating housing price escalation. In Singapore, maintaining policy coordination between monetary and housing supply instruments remains key to ensuring market stability. Originality/value This study offers one of the few comparative empirical analyses of housing price determinants in Malaysia and Singapore using ARDL and Granger causality. The study contributes to the limited Southeast Asian literature by integrating macroeconomic theory with real estate market evidence to guide housing policy and investment strategies.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.