The relationship between macroeconomic variables and housing prices in Saudi Arabia using vector auto-regression analysis
Joint Authors
Ahmad, Dirar al-Mahi al-Ubayd
Muhammad, Khalid Abd al-Aziz Hasan
Source
Rihan Journal for Science Publishing
Issue
Vol. 2022, Issue 20 (28 Feb. 2022), pp.18-42, 25 p.
Publisher
Fiker for Research and Development
Publication Date
2022-02-28
Country of Publication
Syria
No. of Pages
25
Main Subjects
Abstract EN
This paper examined how housing prices were determined by some macroeconomic factors in Saudi Arabia.
Variables used are Gross Domestic Product Per capita (GDPP), Consumer Prices Index (CPI), and Unemployment Rate (UNEMP).
Quarterly data for a period (2014q1 – 2019q4) were collected from publications of Saudi Arabian Monetary Authority (SAMA).
The paper followed a descriptive analytical method in which Vector Auto-Regression Analysis (VAR) is employed to capture the dynamic effect of the variables on housing prices.
Granger Causality, Variance Decomposition and Impulse response function were also used.
The results showed that housing prices were insignificantly and positively related to GDPP, whereas it was negatively related to both (CPI & UNEMP).
Only CPI had a significant relationship.
The three variables, jointly, had Granger causality on HPI.
Variance decompositions reflected that CPI was the variable with the highest explanatory power over the variation of housing prices, followed by GDPP and the UNEMP respectively indicating that CPI was the most influential determinants for housing prices.
The findings suggested that Saudi authorities need to pay close attention to the effect of CPI on housing investment, and in view of the relatively large share of that sector, on overall growth.
Finally, the paper expects that the results would provide awareness into the relation between housing investment and macroeconomic indicators in other developing countries.
American Psychological Association (APA)
Ahmad, Dirar al-Mahi al-Ubayd& Muhammad, Khalid Abd al-Aziz Hasan. 2022. The relationship between macroeconomic variables and housing prices in Saudi Arabia using vector auto-regression analysis. Rihan Journal for Science Publishing،Vol. 2022, no. 20, pp.18-42.
https://search.emarefa.net/detail/BIM-1430434
Modern Language Association (MLA)
Ahmad, Dirar al-Mahi al-Ubayd& Muhammad, Khalid Abd al-Aziz Hasan. The relationship between macroeconomic variables and housing prices in Saudi Arabia using vector auto-regression analysis. Rihan Journal for Science Publishing No. 20 (Feb. 2022), pp.18-42.
https://search.emarefa.net/detail/BIM-1430434
American Medical Association (AMA)
Ahmad, Dirar al-Mahi al-Ubayd& Muhammad, Khalid Abd al-Aziz Hasan. The relationship between macroeconomic variables and housing prices in Saudi Arabia using vector auto-regression analysis. Rihan Journal for Science Publishing. 2022. Vol. 2022, no. 20, pp.18-42.
https://search.emarefa.net/detail/BIM-1430434
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references : p. 39-42
Record ID
BIM-1430434