Realizing the dream of owning a home

Robert A. Opoku and Alhassan G. Abdul‐Muhmin

International Journal of Housing Markets and Analysis, 2013, vol. 6, issue 3, 300-316

Abstract: Purpose - This study aims to investigate the house purchase behavior of low‐income Saudis regarding the sources of financing they wish to have access to, their preferences for alternative financing options, and the monthly payment amounts they could afford to make in case of mortgage financing across demographic groups. Design/methodology/approach - A survey with a sample of 815 low‐income respondents with a monthly income of SR7,000 was conducted using a structured questionnaire. Findings - The main findings of the study are that the loan from the government Real Estate Development Fund (REDF) is found to be the most preferred financing alternative, the second being cash payment; whilst the most frequently indicated option for monthly mortgage payments is between SR1,000 and SR1,500 (US$267 and US$400) among low‐income Saudis. Research limitations/implications - This study provides a snapshot of low‐income Saudi consumers' knowledge of financing options and their choice among alternative financing options. Practical implications - This also offers opportunities for real estate developers to seek competitive advantage by coming up with innovative financing options to target low‐income earners. Originality/value - There is limited published work exploring consumer knowledge of house purchase finance options that captures this phenomenon from the perspectives of low‐income Saudi consumers. This study contributes in filling this gap.

Keywords: Arab; Developing countries; Housing financing; Middle East; Low‐income consumers; Real estate; Saudi Arabia (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijhmap:v:6:y:2013:i:3:p:300-316

DOI: 10.1108/IJHMA-08-2012-0037

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