The impact of stock market and macroeconomic variables on real estate prices dynamics: evidence from Saudi Arabia

Dohaiman, Mohammed Saleh Al

doi:10.1504/ijsrece.2017.084354

Cited by 4 publications

(4 citation statements)

References 6 publications

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Section: Resultssupporting

confidence: 87%

“…This finding on the GDP supports the argument in the Dipasquale and Wheaton (1996) model. The findings on the GDP are also in line with Ouma (2015), Égert and Mihaljek (2007) and Njaramba et al (2018) who concluded in their studies that an increase in the GDP has a significant impact on the real estate prices. An increase in the inflation rates means that the people spend more on other commodities such as foodstuff and therefore the money available for housing purchases is limited thereby…”

Section: Long-run Effects Of Macroeconomic Factorssupporting

confidence: 87%

“…He used ARDL and VAR methods to model the effects of the selected variables on the growth of housing prices and concluded IJHMA 17,2 that housing prices have a contemporaneous impact on the selected macroeconomic variables. Additionally, Ouma (2015) used multiple regression techniques to study the effects of macroeconomic variables on real estate prices in Kenya using monthly data for a period of ten years. The variables considered in the study were interest rates, inflation rates, money supply and GDP.…”

Section: Housing Performance In Kenyamentioning

confidence: 99%

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Modeling the dynamic effects of macroeconomic factors on housing performance in Kenya

Okuta

Kivaa

Kieti

et al. 2022

IJHMA

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Purpose This paper studies the dynamic effects of selected macroeconomic factors on the performance of the housing market in Kenya using Autoregressive Distributed Lag (ARDL) Models. This study aims to explain the dynamic effects of the macroeconomic factors on the three indicators of the housing market performance: housing prices growth, sales index and rent index. Design/methodology/approach This study used ARDL Models on time series data from 1975 to 2020 of the selected macroeconomic factors sourced from Kenya National Bureau of Statistics, Central Bank of Kenya and Hass Consult Limited. Findings The results indicate that household income, gross domestic product (GDP), inflation rates and exchange rates have both short-run and long-run effects on housing prices while interest rates, diaspora remittance, construction output and urban population have no significant effects on housing prices both in the short and long run. However, only household income, interest rates, private capital inflows and exchange rates have a significant effect on housing sales both in the short and long run. Furthermore, household income, GDP, interest rates and exchange rates significantly affect housing rental growth in the short and long run. The findings are key for policymaking, especially at the appraisal stages of real estate investments by the developers. Practical implications The authors recommend the use of both the traditional hedonic models in conjunction with the dynamic models during real estate project appraisals as this would ensure that developers only invest in the right projects in the right economic situations. Originality/value The imbalance between housing demand and supply has prompted an investigation into the role of macroeconomic variables on the housing market in Kenya. Although the effects of the variables have been documented, there is a need to document the short-run and long-term effects of the factors to precisely understand the behavior of the housing market as a way of shielding developers from economic losses.

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Section: Resultssupporting

confidence: 87%

Section: Long-run Effects Of Macroeconomic Factorssupporting

confidence: 87%

Section: Housing Performance In Kenyamentioning

confidence: 99%

See 1 more Smart Citation

Modeling the dynamic effects of macroeconomic factors on housing performance in Kenya

Okuta

Kivaa

Kieti

et al. 2022

IJHMA

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“…The study focuses on the determinant of real estate prices dynamics in the case of Saudi Arabia. The regression shows that stock market returns move with real estate prices in bullish markets (Dohiman, 2017). How real estate investment affects Chinese economic growth which has a positive impact on economic growth both at national and regional levels.…”

Section: Review Of Literaturementioning

confidence: 99%

A study on the mediating effect of residential loans on total real estate loans of banks in India

Aggarwal

Solomon

2019

JPIF

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Purpose The purpose of this paper is to examine the impact of residential and commercial loans on total real estate sector loans by using partial least square–structured equation modelling (PL–SEM) method. The residential loans as a mediator have been used to know the mediation effect between commercial and total real estate loans of banks in India. The residential loans as a mediator govern the relationship between commercial loans and total real estate loans in India. Real estate sector development is a lucrative opportunity for India. The real estate sector plays a major role in shaping economic conditions of the individuals, firms and family. Design/methodology/approach The research is descriptive in nature. The study on residential loans, commercial loans and total real estate loans has been taken into consideration, and on the other hand the measurement and structural model have been employed to the study the impact of residential loans and commercial loans on total real estate loans in India by using PL–SEM. The residential loans as a mediator have been taken to study the mediation effect of the relationship between commercial loans and total real estate loans in India. Findings The outcome of the structural model that is bootstrapping technique shows that there is an impact of residential and commercial loans by public and private sector banks on total real estate sector development in India. The residential loans show the full mediation effect between commercial loans and total real estate loans as the value of variation accounted for (VAF) is more than 1.93 which shows residential loans govern the nature of variable between commercial loans and total real estate loans. Practical implications The public and private sector banks are contributing to the real estate sector development in India which increases the economic growth of the country. The mediation analysis shows that residential loans are an important aspect between commercial and total real estate loans in India as the demand for residential housing is more in India. The increasing role of banks in the real estate sector strengthens the financial capability in the real estate sector market, and the property buyers will able to purchase more property which leads to increasing demand for real estate sector. Originality/value The research paper is original, and PL–SEM has been used to find the results.

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The impact of the mortgage on the real estate market: a study case in Saudi Arabia

Ajeeb

Lai

2022

IJHMA

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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.

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The impact of stock market and macroeconomic variables on real estate prices dynamics: evidence from Saudi Arabia

Cited by 4 publications

References 6 publications

Modeling the dynamic effects of macroeconomic factors on housing performance in Kenya

Modeling the dynamic effects of macroeconomic factors on housing performance in Kenya

A study on the mediating effect of residential loans on total real estate loans of banks in India

The impact of the mortgage on the real estate market: a study case in Saudi Arabia

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