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Is there A Bubble in Saudi Real Estate? Evidence from the Stock Market

Author

Listed:
  • Mahmoud Haddad

    (University of Tennessee-Martin, Martin, USA)

  • Sam Hakim

Abstract

This paper analyzes the real estate price data in Saudi Arabia, a country not suspected of experiencing a price bubble, but where restrictive land ownership rights are similar with other countries in the GCC. A crucial difference however, is that Saudi Arabia is a vast country when compared with land-tight neighbors such the UAE and Qatar, and where the existence of price bubbles in real estate are not in question. Specifically, our study tries to answer the following questions: is there any evidence of a price bubble in real estate valuations in Saudi Arabia between 2002 and 2010? How did the real estate valuations compare with those in the stock market? Were the real estate valuations justified in relation to the company earnings?

Suggested Citation

  • Mahmoud Haddad & Sam Hakim, 2012. "Is there A Bubble in Saudi Real Estate? Evidence from the Stock Market," Working Papers 732, Economic Research Forum, revised 2012.
    • Handle: RePEc:erg:wpaper:732
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    References listed on IDEAS

    as
    1. Case Karl E. & Quigley John M. & Shiller Robert J., 2005. "Comparing Wealth Effects: The Stock Market versus the Housing Market," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-34, May.
    2. Froot, Kenneth A & Obstfeld, Maurice, 1991. "Intrinsic Bubbles: The Case of Stock Prices," American Economic Review, American Economic Association, vol. 81(5), pages 1189-1214, December.
    3. Marjorie Flavin & Takashi Yamashita, 2002. "Owner-Occupied Housing and the Composition of the Household Portfolio," American Economic Review, American Economic Association, vol. 92(1), pages 345-362, March.
    4. Karl E. Case & Robert J. Shiller, 2003. "Is There a Bubble in the Housing Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 299-362.
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