Abstract:

Different macroeconomic factors affect the housing price index. In this study, the Saudi Arabian gross domestic product per capita and the consumer price index are two determinants that are examined using the Vector Error Correction Model (VECM). The analysis discovered two co-integration correlations between the three variables. Over time, consumer prices have a favorable effect. The three variables seem to mutually promote one another over the long run. Future studies in the area should investigate additional monetary and fiscal variables that might affect Saudi house prices.