DETERMINANT OF SUPPLY

INTRODUCTION

Definition of determinant of supply is when there are any changes in non-price

factors, it will shift an entire supply curve whether increasing or decreasing in market
supply. When there are any changes of price, the determinant of supply also
changed according to it. These changes are affected by many factors such as
amount of seller in a market or shops, a good’s production level of technology, inputs
of prices that used to produce any good, any subsidies or taxes in market, price that
could be produced by goods sellers, presumptions of the produces of the future
prices. Determinant of supply correlated with many important factors that will
determine the success of any produced goods. The study of determinant of supply
should be taken seriously in Malaysia with proper education and information of how
the determinant of supply will affect the result of any goods produced.
DETERMINANT OF SUPPLY IN HOUSING INDUSTRY IN MALAYSIA

Determinants of supply and housing industry are very correlated with each
other. The relationships are important because any changes or in determinant of
supply will greatly affect the success of housing industry in Malaysia.

Factors that influenced by determinant of supply in housing industry in Malaysia:

1. Prices of housing industry in Malaysia

The most important factors in deciding the changes of the determinant of

supply is prices of houses. Customers will check the price of house that they
wanted to buy first to ensure they can afford to buy the house. Thus, the
factors affect the supply of houses by the demand of customers.

2. Affordability

Any rising in incomes will determine the determinant of supply in housing

industry because more customers can afford to buy a house. Thus, it will
increase the supply of houses in housing industry because demand will
increase as more of them wanted to buy a house of their own.

3. Subsidies and Taxes of houses scheme

Subsidies and taxes that determined by the government affect the supply of
houses in Malaysia. Customers are affected by the different in subsidies and
taxes of houses that they want to buy. So, the supply of houses will change
according to the different of taxes and subsidies of houses that will be sold.
4. Technology of housing industry in Malaysia

Customers are attracted with new technology that introduced in any industry.
Housing industry also one of the industries that will affect greatly by the
introduction of new technology that will be used in the industry. The
technology will make them interested in buying houses so the supply of
houses will increase by the demand of customers that become interested
because of the newly introduced technology.

5. Number of sellers in housing industry

Number of sellers in the industry also affect the determinant of supply. It

caused by the increasing of supply by the sellers and less sold houses. The
cause will significantly decrease the supply of houses because there will be
no profit for the sellers if they increase the supply of the houses.

6. Interest Rates

An increase in interest rates of houses will make customers to decline any

offer of houses that they wanted to buy. They will have to pay more money to
repay their loan. Based on the average salary in Malaysia, a loan instalment
will have big difference in their financial. Thus, the additional money that they
need to pay will be a bad decision for their financial problems. Therefore, the
supply of houses will decrease as the amounts of houses sold decrease in
average figure.
7. Assumptions of customer towards the future of determinant supply

Assumptions or predictions of customer towards future price, technology and

rate of interest in housing industry in Malaysia will cause a change in the
determinant of supply. The research and study that the customer done to
predict the future of housing industry will make more customers interested.
Moreover, the increase of interested people that wanted to buy houses will
give a big change in rate of house sold in housing industry. Therefore, the
supply will increase because of the insignificantly increasing sales of the
houses.