The latest data from from the Saudi Central Bank that residential villas continue to dominate mortgage financing, far outpacing demand for apartments and land. Conversely, the data showed a slowdown in the activity of financing companies, which recorded a notable decline in the volume of new mortgage financing during the first quarter of the year, reflecting a disparity in the performance of financing entities within the real estate market.
26.4 billion riyals in bank financing over five months
The aggregate figures released by the Saudi Central Bank show that banks provided new residential real estate financing to individuals totaling 26.446 billion riyals during the period from January through the end of May 2026, through 39,880 financing contracts.
Banks began the year by disbursing 6.189 billion riyals in January through 9,005 financing contracts, before the value of financing declined in February to 5.371 billion riyals through 8,353 contracts.
In March, financing continued to decline, reaching 4.187 billion riyals spread across 6,398 contracts, However, activity rebounded strongly in April, which recorded the highest monthly financing value during the period, as financing exceeded 6.326 billion riyals across 9,579 contracts—also the highest number of contracts during the first five months of the year.
In May, the value of new financing reached 4.373 billion riyals, spread across 6,545 financing contracts.
Villas Account for Two-Thirds of Real Estate Financing
Central Bank data showed that residential villas continued to account for the largest share of real estate financing directed toward individuals, with total financing allocated for their purchase reaching 17.069 billion riyals during the first five months of the year, representing approximately 64.5% of total residential real estate financing.
Residential apartments ranked second with total financing of 7.665 billion riyals, equivalent to about 29% of total financing, while land accounted for the smallest share, with financing for their purchase totaling only 1.712 billion riyals.
These figures indicate that more than 93% of total new real estate financing went toward ready-to-move-in residential units, such as villas and apartments, which reflects the concentration of demand on ready-to-move-in residential products, compared to land.
Financing Details by Property Type
During January, villas accounted for 4.079 billion riyals of new financing, compared to 1.699 billion riyals for apartments, while land financing totaled 411 million riyals.
In February, financing for villas fell to 3.425 billion riyals, while financing for apartments reached 1.616 billion riyals, and land financing stood at 330 million riyals.
In March, financing for villas fell to 2.614 billion riyals, while apartments received 1.293 billion riyals, compared to 280 million riyals for land.
April saw the highest levels of financing during the period, with financing for villas rising to 4.190 billion riyals, while financing for apartments reached 1.780 billion riyals, and financing for land reached 356 million riyals.
In May, financing for villas reached 2.761 billion riyals, while apartments received 1.277 billion riyals, and land financing totaled 335 million riyals.
A clear indicator of residential demand trends
The cumulative distribution of real estate financing reveals that the Saudi residential market remains heavily focused on the purchase of ready-to-move-in residential units, as villas and apartments together accounted for more than 93% of the total new real estate financing provided by banks during the first five months of 2026.
Mortgage Companies Report a Decline in the First Quarter
In contrast, the monthly statistical bulletin issued by the Saudi Central Bank showed a decline in the activity of mortgage companies, with the volume of new residential mortgage financing provided to individuals during the first quarter of 2026 falling by 21.9% compared to the fourth quarter of 2025.
Total new financing provided by mortgage companies amounted to 585 million riyals during the first quarter of this year, compared to 737 million riyals during the fourth quarter of 2025.
Decline in Financing Across Various Real Estate Products
Central Bank data showed that new real estate financing provided by finance companies was distributed across three main types of properties: villas, apartments, and land.
Financing for villas totaled 249 million riyals during the first quarter of 2026, compared to 284 million riyals in the fourth quarter of 2025.
Financing for apartments also declined to 279 million riyals, down from 353 million riyals in the previous quarter, while financing for land fell to 57 million riyals from 100 million riyals during the same period.
Year-over-year decline despite improvement in villa financing
On a year-over-year basis, data from the Saudi Central Bank showed that new real estate financing provided by finance companies to individuals declined by 5.4% during the first quarter of 2026 compared to the same period in 2025.
Total financing amounted to 585 million riyals, compared to 619 million riyals in the first quarter of last year.
Despite the overall decline, the value of financing allocated for the purchase of villas rose to 249 million riyals, compared to 175 million riyals a year ago, while financing for apartments fell from 347 million riyals to 279 million riyals, and financing for land declined from 97 million riyals to 57 million riyals.
