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Demographic factor
The main determinants of the demand for housing are demographic. Population size and population growth are the core demographic variables in Penang. Penang has the highest population density in Malaysia on Penang islands. High level of population will influence demand of housing in Penang. Penang has a declining supply of land available for development on the island, in part due to its geographical constraints, but its colonial and cultural history has also left a lasting legacy on the pattern of land ownership. Demographic trends display changes in the population over time and are a key factor in planning for the housing needs of any location. In understanding demographic trends, net migration needs to be factored in, so both immigration and emigration need detailed consideration. Population growth and household formation Penang has a growing population. Greater demand for housing will contribute to increases in prices. This level of needs analysis needs to be much more detailed and linked to economic factors such as household income. For demographics' factor that also includes the age, social class and race or ethnicity. Age of the buyer also important that may influence them in decision making because it may show that what type of residential property they want that can give them satisfaction or needs for the requirement of the property. Population increases in Penang will increases demand of housing market in Penang. Price

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Income factor
Income is an important determinant of demand that influence the market demand for housing grew as real income rise. The price of housing is also an important variable influencing demand for housing. The income level has relationship with price of housing that influence the demand of housing market in Penang. Medium cost housing in Penang is the property that sell in the median price that can be purchase by medium income group and high income group. Then, high cost housing in Penang is the property that the price is high and usually for the high income group of people. Price

Price
The high cost housing is selling with the high price that the price influences by the material, the design, the location and the size or area. The people that usually buy the high cost property are the people that need the high satisfaction and also all about luxury. Therefore, individual income increases will affect demand of housing market. When individual income increases, the demand purchase the houses will increases. The average monthly household income in Penang grew from RM3,531 in 2004 to RM4,407 in 2009, equal to a 25% growth over 5 years. The percentage of households in Penang with an income under RM3,000 fell from 57.7% to 46.6%, while the percentage of households with an income in excess of RM5,000 increased from 18.3% to 26.9%. However, the percentage of households earning between RM3,000 and RM5,000 grew by only 2.5% over 5 years, moving from 24% in 2004 to 26.5% of households in 2009. D2

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Construction Cost factor
The supply factor that influence housing market is quantity of incoming supply. The quantity of incoming supply is typically influenced by cost, price of existing stock of houses, and the technology used in the construction, where material costs tend to contribute the largest share of the construction cost, about 30% to 40%. In the short run, supply tends to be very price inelastic increase in cost will have less effect on supply. However, over a longer period, it tends to be very price elastic increase in cost will lower supply. A study conducted by Fallis in 1985 showed price elasticity of supply was estimated at 8.2, indicating increased in cost would lower supply significantly. The degree of elasticity depends on the elasticity of substitution and supply restrictions. For example, the use of capital intensive...
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