THE EFFECT OF MACROECONOMIC FACTORS ON FINANCIAL PERFORMANCE OF THE REAL ESTATE IN SAUDI ARABIA

Abstract

Real estate is booming with an increasing population and living standards. People are putting a lot of money in it, and this is seen as a positive response to the growth of the economy. In addition, various macroeconomic variables are linked to real estate and its financial performance in the Kingdom of Saudi Arabia. Thus, this work investigated the effect of macroeconomic factors on the financial performance of the real estate industry in Saudi Arabia. The methodology used for this research is quantitative in nature due to the use of the Ordinary Least Square (OLS) method and the regression analysis, which will generate data to understand the link between the macro-economic factors and the financial performance of real estate. The results generated showed that the factors affecting REITS in Tadawul market are GDP, REER, unemployment and the interest rate. GDP has significant positive impact on REITS, inflation does not have any impact on REITS, REER has significant negative impact on REITS, unemployment has significant negative impact on REITS and interest rate has a significant negative impact on REITS.