Indicators for residential mortgage financing in the Kingdom in 2026 with noticeable signs of a slowdown, after new loans to individuals declined in February, directly reflecting market shifts and regulatory measures aimed at achieving real estate market balance, amid changes in demand trends and financing patterns.

The volume of new residential mortgage financing provided to individuals in the Kingdom fell to 5.612 billion riyals in February, compared to 6.365 billion riyals in the previous month, a decrease of 11.8%, according to data from the monthly statistical bulletin issued by the Saudi Central Bank.

Experts in the real estate and financial sectors believe this decline is linked to recent measures taken to promote balance in the real estate market, which have affected the pace of financing and the volume of demand in recent times.

The data showed that new residential real estate financing is divided between loans provided by banks and finance companies, with banks accounting for the largest share at 5.371 billion riyals in February 2026, compared to approximately 6.189 billion riyals a year ago, while finance companies recorded 241 million riyals during the same month, up from 176 million riyals in January.

Decline in Bank Financing
Real estate financing provided by banks fell by 13.2% on a month-over-month basis, with financing continuing to be concentrated in three main sectors: villas, apartments, and land.
The villas sector led bank financing with 3.425 billion riyals in February, compared to 4.079 billion riyals in January, while financing for apartments stood at 1.616 billion riyals compared to 1.699 billion riyals, and financing for land totaled 330 million riyals compared to 411 million riyals during the same period.

On a year-over-year basis, the data showed a larger decline in retail bank financing of 35.6%, falling from 8.908 billion riyals in February 2025 to 5.371 billion riyals in February 2026. The decline affected all sectors; financing for villas fell from 5.573 billion riyals to 3.425 billion riyals, and financing for apartments fell from 2.899 billion riyals to 1.616 billion riyals, while land financing fell from 436 million riyals to 330 million riyals.

Rise in Financing Provided by Companies
In contrast, finance companies recorded a contrasting performance, as new residential real estate financing provided by these companies rose by 36.9% on a month-over-month basis, reaching 241 million riyals in February compared to 176 million riyals in January.
Financing from finance companies was distributed among villas, totaling 103 million riyals compared to 92 million riyals in January, and apartments at 111 million riyals compared to 92 million riyals, while land financing jumped to 26 million riyals compared to 8 million riyals during the previous month.

The data also showed year-over-year growth in financing company loans of 21.7%, rising from 198 million riyals in February 2025 to 241 million riyals in February 2026, driven by increased financing in the villa and apartment sectors, while land financing declined compared to last year.