1.0 Introduction

Residential property market in Malaysia has well-informed significant price extension over the past fifteen years with prices, at some states, extended at higher rates. House price movements is inherent with the regional economics and regional demographics such as income, cost of capital, population change and stock prices. However, sudden price change could affect home ownership to some extent. Under any environment, house as a basic necessity to continue living. The health of the housing market is a topmost importance and straight related to ability to own and thus, the purchasing power of the public since housing industry is an important sector to the Malaysian economy. The graph below shown the Malaysia house price index from 2000-2014 which well explained the percentage of house price increasing of each year.

2.0 Factors that cause the house price to increase

House price determined by the market in many factors. The market term is known when a group of buyers and sellers interact to exchange goods and services. Buyers demand goods and services yet sellers supply goods and services in the market. Demand is defined as the ability and willingness to buy a particular quantities of goods in a given period of time at a particular price. The law of demand states that the higher the price of a product, the lower the quantity demanded of that product and the lower the price of a product, the higher is the quantity demanded, ceteris paribus. Supply is defined as the ability and willingness to sell or produce a specific product and service in a given period of time at a certain price. The law of supply states that the higher the price of a product, the greater is the quantity supplied of that product and the lower the price, the lower is the quantity supplied, ceteris paribus. Equilibrium refers to the allocation of goods is at its most efficient