How did the oil prices’ drop affect the economy and the real es

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    It can be attributed to the Dominos Effect. As explained earlier, the Saudi Arabian economic growth and sustainability was critically dependent on the oil industries.

    When the oil prices fell, the generated revenues were reduced significantly and, therefore, the government decided to minimize the damage by cutting down its spending and the subsidies it used to offer for its citizens on one hand, and by imposing taxes on the other.

    Locally speaking, this weakened the Saudi Arabians’ purchasing power and their will to spend their money on acquiring new properties. Internationally, the downshift in the oil industry negatively impacted the investors’ interest in the kingdom, which contributed to a shattering blow to the energy industry employment rate.

    It is also worth mentioning that the expats play a major affective role. As a matter of fact, more than 650,000 expats are expected to leave KSA by the year 2020. This led to the rise of the calls for the Saudization (known as Nitaqat in Arabic) of the local jobs on one hand, and a negative impact on the real estate market on the other.

    This did not happen in Saudi Arabia only, but in all of the GCC region; but again, it was impacted the most by it because of its sole economic dependence on oil prices. Eventually, the real estate market in Saudi Arabia suffered a reduced demand, which naturally led to the downfall in its prices.