The effects of housing price on the mortgage debt in Malaysia: new evidence from FMOLS method

What is it about?

This study investigates the impact of housing price on mortgage debt accumulation in Malaysia, taking into account the structural break effects associated with the Global Financial Crisis (GFC). Using the FMOLS method, the study found a moderate positive relationship between housing price and mortgage debt, with the impact of the GFC being positive but insignificant. The study's findings provide guidance for policymakers and the banking sector in predicting household borrowing behavior during future economic crises. The study's contributions include providing new evidence, enhancing the robustness of empirical results, and highlighting the importance of testing for structural breaks in time series analysis.

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