JEDDAH: The problem of housing among Saudis will be solved considerably with the Saudi Credit Bank's (SCB) plan to provide home-purchase loans that can be paid back on easy installments.
"We have completed a study on the plan and it needs just the approval of the board of directors," said Abdul Rahman Al-Saheebani, director general of SCB.
The SCB board will meet next week, he said, adding that it would approve the proposal in order to help Saudis own their homes. The bank will purchase homes for applicants from real estate developers, Al-Jazirah Arabic daily said quoting the official.
The bank will appoint panels to identify housing locations and negotiate prices.
The SCB move is significant as Saudi Arabia has a housing deficit of two million residential units, a figure that has been rising by 200,000 a year. Home ownership in the Kingdom stood at 30 percent, the lowest level among GCC countries.
The government has allocated SR10 billion from surplus budget to build low-cost housing units for the country's poor. About 44 percent of Saudis live in rented apartments and 30 percent (695,000 families) in unsuitable housing.
India's Housing Development Finance Corporation (HDFC) is in talks with the Kingdom to set up two home finance companies in the Kingdom. "We signed an agreement for this during the landmark visit of Custodian of the Two Holy Mosques King Abdullah to New Delhi in January 2006," Renu Sud Karnad, HDFC's joint managing director, told Arab News.
"We are now providing technical assistance to Saudi firms to set up one or two companies such as HDFC in order to give loans to Saudis. We are working on two, and within six months we'll be able to finish one," she explained.
Saudi Arabian Real Estate Financing Co. (Refco) recently announced its plan to start offering home loans in the Kingdom by 2010 and wants to raise SR1 billion ($267 million) by selling shares to investors.
The Bahrain-based International Investment Bank said it would participate in one of the major housing projects in Saudi Arabia this year; the expected total size of the project would be $500 million.
By P.K. Abdul Ghafour
© Arab News 2009
