Comparison of Property Market between Malaysia and China - Dissertation Example

Attempts at modelling of China and Malaysia property market in the wake of recessionary trends arises fresh curiosity to the application of theory in actual market functioning. This dissertation is such an attempt to measure the maturity and advancement of both countries property market through the DiPasqual and Wheaton model. Non-academic research of the housing markets in major cities of China and Malaysia, which include Shanghai, Beijing, Kuala Lumpur and Penang, has enriched the research experience.

Other important variables out of the context of theory have been discussed to throw light on housing market functioning, which include the role of monetary policy, macroeconomic impacts of China on its property market, impact of business cycles on housing and the role played by foreign direct investment in influencing the property market behaviour.Property markets of Malaysia and China have felt the heat of the financial crisis worldwide, affected by the after-effects that have been more acute and straight in property business than any other industry segment, leaving aside financial markets.

Big cities of China such as Shanghai and Beijing have seen a decline in property prices and the ripple effect has shifted from these big cities to middle and small cities as the financial crisis spreads. It was bound to create far-sighted macro economy repercussions in the Chinese property market. To slow down the repercussion effect on smaller cities and for the growth of property market in big cities, the government policy should be, according to Hai & Jing (2008) of “savings big cities and not touching small cities”.

Actually some signals of improvements in the world economy are being felt since April 2009; as a result recession has started taking a U-turn. According to the Organisation for Economic Co-operation and Development (OECD), “tentative signs of, at least, a pause in the economic slowdown” have been noticed in countries that include China also. According to Jean-Claude Trichet, the president of the European Central Bank, there has been a “slowing down in the decrease in GDP” indicating pick up in economic growth in certain countries.