REAL ESTATE

Saudi real estate financing to reach $137bln by 2020

Reuters Images/Faisal Al Nasser
Reuters Images/Faisal Al Nasser
Reuters Images/Faisal Al Nasser
Companys role includes providing the necessary liquidity to achieve the targeted growth
PHOTO
 

RIYADH — To explore the development of the non-banking real estate sector and address its obstacles, Bidaya Home Finance organized a workshop of real estate companies in the capital, recently.

This is in line with the Kingdom’s Vision 2030 that seeks to increase the percentage of homeowners and enable citizens to own their first homes.

The workshop was attended by Minister of Housing Majed Al-Hoqail. Also in attendance were Khalid Al-Amoudi, seneral supervisor of the Real Estate Development Fund; Dr. Bader Al-Otaibi, director general of supervision of finance companies at the Saudi Arabian Monetary Agency (SAMA). Several CEOs of real estate financing companies, as well as the CEO of the Saudi Real Estate Refinance Company also participated in the deliberations.

The workgroup discussed the development of the non-banking real estate financing sector and ways to increase its efficiency by raising its current share from eight to a minimum of 30 percent by 2020. This is in addition to identifying the obstacles hindering the sector’s growth in terms of regulatory and legislative aspects, as well as preparing necessary recommendations and suggestions.

Introduced during the meeting was the housing program, which is one of the programs in Vision 2030. The program includes 16 governmental entities working together as one team in partnership with the private sector in order to raise the percentage of homeownership to 60 percent by 2020 and to 70 percent by 2030.

The programs and goals of the Real Estate Development Fund were also showcased, as well as the segments of beneficiaries of these programs, the funding opportunities per segment, and the products to be provided in partnership with the financiers, such as: financing residential units under construction; self-financing building; offering finance products that meet the needs of retirees, such as an extension of the funding period up to the age of 70; providing financing solutions to private sector employees and entrepreneurs through the mortgage guarantees program; and other products that meet the needs of all segments. All the products will be supported through a subsidized real estate loan, which the entire profit will be covered for those with a monthly income of SR14,000 or less.

At the end of the workgroup, the CEO of the Saudi Real Estate Refinance Company, which is owned by the Public Investment Fund, explained the nature of the company and its goals; which include achieving growth and stability in the real estate financing sector and refinancing 10 and 20 percent of the total existing real estate loans by 2020 and 2026, respectively. The company’s role also includes providing the necessary liquidity to achieve the targeted growth, so that real estate financing – currently at SR290 billion — can reach SR502 billion by 2020, in addition to offering financing at a fixed cost that can lead to stable real estate financing and fixed monthly installments for beneficiaries.

 

© Copyright 2018 The Saudi Gazette. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

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