SHARIAH COMPLIANT REAL ESTATE INVESTMENT AND ECONOMIC GROWTH: CASE OF KINGDOM OF SAUDI ARABIA

Abstract

The concept of Shariah compliant derive from Islamic law or the Shari’ah law, the roots of which in turn are derived from Qu’ran, sunna, and ijma or consensus of the community of scholars and finally qiyas, or analogical assumptions and reasoning. This study aimed to examine the relationship between Shariah compliant real estate investment and economic growth in Kingdom of Saudi Arabia. Besides, the study also investigated the effect (s) of Shariah compliant real estate on the GDP. The study had used an ordinary least square (OLS) or linear least squares to analyze the data from 2002 to 2012 in Saudi Arabia. The findings found that real estate investment had a positive but non-significantly effects on economic growth. Meanwhile, the real estate investment had negative effects on gross domestic product. The main implications of this study were providing financial investment strategies for investors, where relying on the vision 2030.