Is There a Bubble in Saudi Real Estate? Evidence from the Stock Market

For most of the past decades, the Gulf Cooperation Council (GCC) region has experienced rapid expansion, driven largely by increasing energy revenues, and growth-focused government policies. As the region's population increases in size, and becomes wealthier and more urbanized, significant opportunities have developed in the housing sector, particularly as it pertains to the region's burgeoning middle class, whose ranks are expanding faster than the economy itself. With all these factors, the paper proposes to analyze the real estate price data in Saudi Arabia, a country not suspected of experiencing a price bubble, but where restrictive landownership rights are similar with other countries in the GCC. The paper questions whether there is any evidence of a price bubble in real estate valuations in Saudi Arabia between 2002 and 2010