Saudi SAMA: Mortgage jumps 3 times for the fourth month

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RIYADH — The monthly report issued by Saudi Arabian Monetary Authority "SAMA" revealed on Thursday that the volume of residential new mortgage finance for individuals provided by commercial banks and companies jumped again in April 2019, for the fourth times, 3 times annually basis. The report said the number of contracts increased for 236%, and about 135% in the volume of financing compared to April 2018, which was 4,286 contracts worth 2.7 billion Riyals.

The number of new residential mortgage contracts reached 14,398 contracts in April 2019 worth 6.419 billion SR, around 94% of them offered by commercial banks, and 6% by companies. The number of contracts registered 19% increase and more than 15% in value, monthly basis. That means the residential financing contracts reached 45,860 contracts during 2019 with 31,528 billion Riyals, According to SAMA.

On the same time, "Sakani", the Ministry of Housing's program, announced that 14,728 families benefited from residential programs in April, 7,088 of them owned their houses. The program served since the beginning of this year 54,965 families in different regions of the Kingdom.

The number of subsidized contracts supported by "Sakani" in April 2019, increased 12% in value and about 15% in the number of subsidized financing contracts within one month. They reached 11,937 contracts, with value of SR 4.92 billion. In March 2019, it recorded SR4.4 billion, for 10,364 financing contracts. Housing programs accounted for 83% of the total number of contracts and about 77% of the value of funding in April 2019.

Observers believe that with this gradual increase in the number of mortgages supported by the governmental housing programs, with an average of 12-14 thousand contracts per month, expected more than 150 thousand of residential financing contracts by the end of 2019.

They pointed out that this will sustain the annual growth rate of the real estate sector from 3.63% in 2017 to 7% by 2020. This is also in line with Saudi vision 2030 to raise the proportion of ownership among Saudis From 53% currently to 60% by the end of 2020 and about 70% by 2030.

In its previous reports this year, "SAMA" indicated that real estate loans jumped more than 3 times this year. The total number of mortgage contracts offered to individuals in January 9,578, compared with 2,674 contracts in January 2018. While the total number in February 2019 was 9,736 financing contracts compared to 3,143 contracts in February 2018, and 12,148 contracts in March 2019 compared to 3,973 in the same month last year.

The total number of mortgage contracts offered to individuals by the end of 2018 reached 50,496 contracts with 29.5 billion Riyals, and in 2017 about 30,833 contracts worth 21,025 billion Riyals. While 2016 witnessed 22,259 financing contract worth 17,096 billion Riyals.

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