Socioeconomic determinants of housing demand in the Eastern Province of Saudi Arabia

Abstract

The rate of urbanization is growing at a geometric level in the emerging countries as a result of industrialization. This cannot be disconnected with the volume of infrastructure that are required to meet the needs of the growing population in these urban areas. Housing, industrial plants, offices and hospitals among other real estate properties become very pertinent to meet the basic and industrial needs of the populace. Moreso, the diversification of the economy from oil, the increase in tourism, and the recent opening of real estate ownership to foreigners have spurred the current growth of the real estate market in Saudi Arabia. The socioeconomic factors which influence housing demand is crucial for policy making and proper planning; however, it has attracted limited body of research in Saudi Arabia. Hence, this study examines the socioeconomic factors which influence the housing demand in Saudi Arabia. A survey was conducted on 706 members of the public in the eastern province of the country. The results from a logistic regression reveal that income, the location of the house, social class, a sustainable and social environment, household size, and academic qualification have a positive and significant influence on housing demand. However, both housing price and interest rate have a negative influence on the housing demand; albeit, the negative impact of the housing price is significant, while that of the interest rate is not significant at 5% level. The result also discloses that males have a greater likelihood of demanding for house than females. These results have important implications for policy makers and all other stakeholders in the Gulf region’s real estate sector towards developing a robust real estate policy and urban planning.

Keywords: Housing demand, socioeconomic factors, logistic regression, Saudi Arabia.

DOI: 10.7176/JESD/17-3-03

Publication date: April 30^th 2026