To What Extent Do Macroeconomic Indicators Influence Residential Property Prices In Major Saudi Cities Between 2016 And 2024?

Abstract

This study investigates the influence of key macroeconomic indicators on residential property prices in four major Saudi cities Riyadh, Jeddah, Dammam, and Madinah over the period 2016 to 2024. Situated within the broader context of Saudi Arabia’s Vision 2030, the research focuses on the impact of inflation, interest rates, unemployment, money supply, GDP growth, and stock market performance on average housing prices. By using annual city-level data, the study addresses a gap in the existing literature by offering localized, data-driven insights into the dynamics of the Saudi real estate market. The findings indicate that interest rates exerted the most consistent and pronounced effect on housing prices, with monetary tightening during 2022–2023 particularly dampening market growth outside Riyadh. Inflation showed limited influence, while expansions in money supply and GDP were positively associated with housing activity. Unemployment and stock market performance demonstrated moderate and variable effects depending on city-specific conditions. These results highlight the need for tailored housing policies and improved alignment between monetary and housing sector planning. The study contributes to a broader understanding of real estate dynamics in rapidly transforming economies and provides valuable implications for policymakers, developers, and investors.