The volume of new residential real estate financing provided to individuals in Saudi Arabia during 2025 declined by 11.42% compared to the previous year, according to data from Saudi Central Bank (SAMA), where the value of new residential financing to individuals decreased by 10.7 billion riyals from its value in 2024.The total value of new housing finance provided to individuals during 2025, from banks and finance companies, amounted to about 82.9 billion riyals, compared to 93.6 billion riyals in 2024, reflecting a decrease in the volume of liquidity directed towards supporting the housing sector. The number of contracts financed during the year decreased by 11%, equivalent to a decrease in 13.74 thousand contracts, bringing the total number of contracts financed to 111.6 thousand contracts in 2025, compared to 125.32 thousand contracts in the previous year.
Real estate financing from banks: Down 11.6% to 80.42 billion riyals
New residential real estate financing in Saudi Arabia was mainly centered on banks, with financing provided by them declining by 11.65%, a decrease of 10.6 billion riyals to 80.42 billion riyals in 2025, compared to 91.02 billion riyals in 2024.
The number of contracts financed by banks also decreased by 11.04%, reaching 108.8 thousand contracts compared to 122.30 thousand contracts in the previous year.
Financing facilities were mainly distributed to the purchase of residential villas, which accounted for the largest share of 51.44 billion riyals in 2025, or about 64% of total bank financing. Apartments came in second place with a value of 24.3 billion riyals, while land received financing worth 4.67 billion riyals.
Finance companies: Limited decline at 2.48 billion riyals in 2025
On the level of non-bank finance companies, the volume of new residential real estate financing provided to individuals decreased by 3.5% to reach 2.48 billion riyals in 2025, compared to 2.57 billion riyals in 2024, the lowest level in seven years.
R1.276 billion worth of facilities were provided for the purchase of apartments, 867 million riyals for villas, and 344 million riyals for land in 2025. The number of contracts financed by finance companies declined by 7.61%, reaching 2.793 thousand contracts compared to 3.02 thousand contracts in the previous year.
The number of contracts financed by finance companies declined by 7.61%.
The impact of monetary policies on real estate financing
Local interest rates witnessed a decline during 2024, after the Saudi Central Bank cut repo and reverse repo rates three times, coinciding with the decisions of the US Federal Reserve. This change was reflected in the cost of borrowing, which affected the volume of real estate financing in 2025. In the context of monthly performance, November 2025 was the lowest value of new real estate financing from banks, as financing amounted to 4.47 billion riyals, recording its lowest levels in more than two and a half years.
As for December 2025, the volume of financing provided by banks decreased to 5.55 billion riyals, compared to 11.94 billion riyals in December 2024, a decline of more than 53.5%. The number of contracts in December fell to 7.61 thousand contracts, compared to 15.3 thousand contracts in December 2024. Financing provided by finance companies in December 2025 fell to 219 million riyals, down 6.8% compared to December 2024, with a slight decline in the number of contracts.
Average mortgage value
The average value of new mortgages in 2025 decreased by 1% to SAR 739k per loan compared to the previous year. Financing for villas maintained the largest share of total financing. The year 2024 was exceptional as it witnessed an increase in the volume of residential financing by 15.88%, with a total financing value of SAR 93.63 billion, compared to SAR 80.8 billion in 2023, with a significant increase in the number of contracts.
Evolution of real estate financing by product type between 2018 and 2025
The financing of villas witnessed a continuous rise until 2021, reaching a peak of SAR 96.19 billion, then began to gradually decline to reach SAR 51.44 billion in 2025.
In contrast, the financing of apartments witnessed a continuous rise until 2024, reaching SAR 28.09 billion, before declining to SAR 24.3 billion in 2025. As for land financing, it recorded a significant rise in 2020 with a value of 35.61 billion riyals, then declined to about 4.7 billion riyals in 2025, with relative stability in recent years. On the other hand, data from finance companies showed a steady decline in the volume of new housing finance over the past years, reaching a 7-year low in 2025.
