Revista de Economía y Negocios

Analysis of the Influencing Factors of Housing Price in Saudi Arabia

Abstract

Alhawil, Abdulaziz Saud* and Suhong li

An analysis of key factors that determine the housing price in Saudi Arabia has been presented. The analysed studies have indicated that the cause for the high housing
price is the high-interest rates of mortgages, high cost of land acquisition, high construction cost due to materials and labour as well as the oil boom that gave rise to
inflation. However, there have been efforts to curb the high cost of housing. These efforts are the ambitious project of smart cities, the rise of microfinance sector that
offers affordable interest rates on mortgages, the practice of crowd funding, the incorporation of sustainability practices whose effect is the innovation that leads to
reduced housing cost as well as the government commitment to upgrade slums areas to accommodate more people. These initiatives would lead to a balance of demand
and supply thereby stabilization of housing prices.