Saudi Arabia’s new mortgage market continued to underperform last year’s levels during the first half of 2026, despite a notable recovery in June, indicating a continued slowdown in residential lending with signs of improvement toward the end of the period.
A report issued by Al Rajhi Capital, based on data from the Saudi Central Bank, that the average monthly volume of new mortgage financing during the first half of the year reached 5.4 billion riyals, down 31.3% compared to the same period in 2025, It was also 2.3% lower than the average for the past 12 months, which stood at 5.5 billion riyals.

Despite this decline, June saw a rebound in mortgage financing activity, with new financing rising to 5.7 billion riyals, marking a 30.4% increase compared to May and a 7.2% increase year-over-year, after reaching 4.4 billion riyals the previous month.
The report noted that banking activity continued to grow in June, with total credit rising by 0.8% on a monthly basis and 7.3% year-over-year, reaching approximately 3.42 trillion riyals, exceeding the average monthly growth recorded since the beginning of the year.
Bank deposits also grew by 0.7% in June and by 8.9% year-over-year to reach approximately 3.13 trillion riyals, while demand deposits declined by 1.3%, compared with a 3.4% increase in time deposits, raising their share to a record high of 43.9% of total deposits.

At the same time, the banking sector posted record pre-zakat and pre-tax profits of 10.1 billion riyals in June, an increase of 15% on a monthly basis and 2.4% year-over-year, while its profits for the first half of 2026 rose by 5.8% compared to the same period last year.