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Household Savings Toward Home Ownership in Saudi Arabia

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Alkhayal, Abdulrahman (2024) Household Savings Toward Home Ownership in Saudi Arabia. PhD thesis, University of Gloucestershire. doi:10.46289/RULK6278

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15098 Alkhayal, Abdulrahman (2024) Household savings towards home ownership in Saudi Arabia.pdf - Accepted Version
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Official URL: https://eprints.glos.ac.uk/15098

Abstract

The main aim of this research is to evaluate the design and effectiveness of government household savings programs, housing policies, and financial awareness initiatives in influencing the homeownership decisions and savings behaviours of Saudi citizens, with a particular focus on the low-income segment. The research examined and defined the gaps in context of Saudi Arabia through the theoretical lens of various economic theories. These included household portfolio theory, neoclassical savings theory, life-cycle savings theory, and portfolio allocation theory. On one hand, the research identified issues such as low household income, limited access to affordable housing finance, high household consumption, and the high cost of living in Saudi Arabia. These factors appeared to constrain households' ability to save for homeownership. On the other hand, the research also highlighted issues like the lack of a strong savings culture and the absence of appropriate housing policies in the country. Additionally, the limited availability of affordable housing finance options and insufficient savings incentives were found to be contributing factors. This imbalance in allocation toward current consumption rather than long-term savings for home ownership may constrain households' ability to take rational decision to save for home ownership, and ultimately lead households to allocate a smaller portion of their portfolio to home ownership which complicates households' ability to save for home ownership over their lifetime. The adopted methodology illustrates the philosophical considerations that determine the technique of the research framework consisting of the essential steps in research design, the selection of an inductive qualitative research strategy, and the rationale for choosing a thematic approach as the qualitative data analysis technique. Furthermore, it details the data analysis processes with a focus on the reliability and validity of qualitative data analysis, the issues to be examined, and the criteria for judging the analysis method. Additionally, it describes the interviews used for data collection, the population, and the sampling procedures. It also explains the issues related to the primary research measurement tool, suchas semi-structured questions, the implementation process, the measurement of research variables, and the thematic analysis techniques employed. The research examined factors affecting home ownership in Saudi Arabia, including household savings, financial awareness, government policies, and inflation. The findings indicate that neither policymakers nor financial institutions haver adequately fulfilled their responsibilities. Fundamentally, the study confirmed significant opportunities exist to boost household savings and homeownership through well-designed savings schemes. Such initiatives could encourage citizens to increase savings dedicated to home ownership. The research emphasizes the essential role of government intervention in housing policy. This suggests the Saudi government must drive the implementation of effective savings programs to enhance household savings and homeownership levels. The findings could make several insightful contributions to the existing knowledge by examining the institutional foundations of household savings policies from multidimensional perspectives and thus contribute to the growing body of literature knowledge on this topic. Finally, the major limitation was the lack of available historical household savings data.

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Thesis (PhD)

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