Identifying the Housing Bubble Predictors in Asian Emerging Economy: Exploring a Novel Model Based on Opinions

Abstract

This study seeks to identify core housing bubble predictors and empirically investigate a novel model for detecting housing bubbles in Malaysia. We engender new insights based on the extraction of real-time opinions of market players about housing bubble formation and collapse. We employ a practical approach using a comprehensive survey of opinions from relevant walks of life via the survey data analysis software, SmartPLS3. Results indicate that housing demand, economic growth outlook, and buyers’ expectations positively impact the housing bubble. This study’s present housing market condition, foreign investment, and government policies are otherwise insignificant. We found that the present housing condition, government policies, and economic growth outlook do not influence the impact of housing demand, buyers’ expectations, and foreign investment on the housing bubble. We employed a cross-sectional research design in this study to obtain our findings. This might have indirectly suppressed more robust findings, which may have been otherwise obtained in the case of a longitudinal study. We advocate that policymakers should not overlook the significant roles of housing demand, economic growth outlook, and buyers’ expectations of the housing bubble. We show that the present housing market condition has no significant moderating effect on the impact of buyers’ expectations, foreign investment, and housing demand on housing bubbles.