The Effect of Remittances on the Real Estate Market in Jordan

Abstract

Propose: The Study aims at investigating the impact of remittances on economic in general and on real-estate sector in particular. A few studies have addressed the importance of remittances of expatriates to their countries. The current study examines the impact of expatriates on real-estate sector in Jordan during the period of 1990-2015. Methods and Procedures: The study has adopted both descriptive and analytical approaches to investigate and measure the impact of Jordanian expatriate's remittances on the investment of real-estate in Jordan throughout the period of 1990-2015. To this end, annual data concerning study variables and E-views for conducting analogue analysis have been employed. Testing tools: The following tests were applied, namely: Dickey-Fuller (ADF) for testing the stillness of the time series model to the variables of the study, CUSUM and CUSUM of Square test for investigating the stability of the model parameters, and (ARDL). Findings and Recommendations: The study has a positive impact on real-estate market, building, and the rate of population growth. The study recommends formulating policies and guidelines for Jordanian expatriates in order to invest their money and remittances in long term developmental investments, develop alternative funding sources in case if remittances have been suspended and diverse investment climates have been provided for Jordanian expatriates. Also, the study recommends adopting official decisions concerning the cease of building for a temporary period to prevent the exacerbation of local real-estate crisis.