Saudi mortgage issuance jumps 56% in March led by house financing

Saudi banks issued $4.52bln of mortgages to individuals

A bundle of 500 and 100 Riyal banknotes in Saudi Arabia.  Image used for illustrative purpose.

A bundle of 500 and 100 Riyal banknotes in Saudi Arabia.  Image used for illustrative purpose.

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RIYADH: Saudi Arabian banks issued 31,826 mortgages in March 2021 worth a record SR16.95 billion ($4.5 billion), an increase of 56 percent from the same period in 2020, according to the country’s central bank.

Lending for houses surged 57 percent year over year to SR13.68 billion, mortgages for apartments increased 23 percent to SR2.57 billion, while financing for land gained 14 percent to SR697 million, data from the Saudi Arabian Monetary Authority (SAMA) showed.

Saudi Arabia has a goal of reaching 70 percent home ownership by 2030. In 2017, the Ministry of Housing and the Real Estate Development Fund launched Sakani to help facilitate that aim through a program of house building, plot allocation and financing support.

Sakani said yesterday it had reached its goal of 60 percent home ownership in 2020, SPA reported. More than 834,000 Saudi citizens have benefited from the program, and it has built 62,000 housing units directly and provided a further 141,000 through partnerships, it said.

The program aims to serve 220,000 Saudi families this year, through the creation of 50,000 housing units, facilitating the reservation of 30,000 residential land plots and arranging 140,000 real estate loans, Sakani CEO Marwan Zawawi said earlier this month.

The number of mortgages provided by Saudi banks rose 21 percent month over month in March, while the value of contracts increased 23 percent, SAMA said in its monthly bulletin.

Banks issued SR46.74 billion of mortgages in the first quarter of 2021, an increase of 50 percent on the same quarter in 2020, the data show.

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