The impact of the mortgage on the real estate market: a study case in Saudi Arabia
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 22 September 2022
Issue publication date: 22 February 2024
Abstract
Purpose
This study attempts to find the response of the real estate market to economic changes by identifying cause-effect relationships between mortgage, residential investment, and Saudi employment.
Design/methodology/approach
A quantitative approach to analytically examine the relationship among the variables. To find out the impact of investment, mortgage and Saudi employment on the Saudi real estate growth from 1970 to 2019. All data sets were obtained from the General Authority for Statistics (GAST), Saudi Central Bank (SAMA) and World Bank Group.
Findings
This study reveals a positive relationship between the mortgage and GDP in the Saudi Arabian real estate market. The same results for employment and investment; both have a positive effect on the GDP of the real estate market.
Research limitations/implications
Analyzing the impact of real estate financing on various industries and the extent to which it is related to employment and unemployment rates is essential for future research. Moreover, this research can be applied to different countries and compared based on similarities and differences in implementing mortgage-related policies.
Practical implications
The government must encourage investment in various ways and establish a stable structure that ensures market stability and finds a balance between supply and demand.
Social implications
This study reflects the importance of real estate financing not only to individuals and governments but also to investors and business workers, and it is essential to analyze the impact of real estate financing on various industries, as well as the extent to which it is related to employment and unemployment rates. This research can be applied to different countries and compared based on similarities and differences in the implementation of mortgage-related policies.
Originality/value
This study contributes to testing this study’s hypothesis: that mortgage positively impacts the real estate market of Saudi Arabia.
Keywords
Acknowledgements
The authors acknowledge the contributions of the Economics and Management Support Fund faculty in Universiti Kebangsaan Malaysia for supporting this paper as a part of the graduate thesis.
Funding: Funding is enabled and organized by the Faculty of Economics and management in Universiti Kebangsaan Malaysia.
Author contributions: Ajeeb Samar conducted the research, conceptualized the main ideas, provided the theoretical framework, and wrote and revised the study. Lai Wei Sieng supervised research progress and revisions.
Availability of data and materials: The data supporting this study’s findings are not openly available due to legally binding data protection reasons. In anonymized form, they can be made available from the corresponding author upon reasonable request.
Declarations: Conflict of interest: The authors have no relevant financial or nonfinancial interests to disclose.
Citation
Ajeeb, S. and Lai, W.S. (2024), "The impact of the mortgage on the real estate market: a study case in Saudi Arabia", International Journal of Housing Markets and Analysis, Vol. 17 No. 2, pp. 329-344. https://doi.org/10.1108/IJHMA-06-2022-0085
Publisher
:Emerald Publishing Limited
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