SUPPLY OVERHANG OF AFFORDABLE HOMES: A SURVIVAL ANALYSIS ON HOUSING LOANS APPLICATION
DOI:
https://doi.org/10.21837/pm.v17i9.603Keywords:
financial exclusion, survival analysis, loan approved, loan appliedAbstract
This study aims to investigate the issue of supply overhang of affordable homes and financial exclusion in the Malaysian housing market. It seeks to decipher the issue of unaffordability of homeownership from the financing perspective as offered by the financial institutions in Malaysia. By employing survival analysis via Kaplan-Meier survival estimates for the period covering Q1:2009 to Q4:2014, our findings suggest that higher inflation rate and lower house price volatility may reduce the likelihood for home loans exclusion and thus allow banks to allocate higher loan disbursements. Meanwhile, higher interest rate excludesclients from having access to finance where the compounding effects of interest shows increased hazards of exclusion among the home loans clients. Understanding the determinants of financial exclusion is, therefore, a pertinent issue to be addressed for potential house buyers to be aware of in order to increase the probability of access to financial services. To the financial institutions, identifying the determinants of financial inclusion will assist them to design products that are more marketable. For the policymakers, the findings of the study will shed some light on the policy ramifications towards promoting affordable homeownership in achieving sustainable development goals as outlined by the United Nation.
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