Although new residential mortgage financing for individuals in Saudi Arabia recorded annual growth of 12.7% during March 2025, central bank data revealed a sharp slowdown in year-on-year growth in bank financing, reaching the lowest level since August 2024, reflecting a divergence in sector performance between banks and real estate finance companies.
According to data from Saudi Central Bank "SAMA", new residential real estate financing provided by commercial banks amounted to about 8.4 billion riyals last March, the lowest monthly level recorded since August 2024, down about 10% year-on-year. Residential villas accounted for the largest share of 62% of financing, equivalent to 5.2 billion riyals, followed by apartments with 33% (2.8 billion riyals), then land with 5% (415 million riyals).
Residential villas accounted for the largest share with 62% of financing, equivalent to 5.2 billion riyals.
Jump in total real estate financing supported by banks
Despite this slowdown in March's performance compared to previous months, the year-on-year performance comparison shows an improvement, as total new residential mortgage financing rose to SR8.59 billion, compared to SR7.84 billion in March 2024, an increase of 12.7%, driven by a 10.2% rise in bank financing.
Despite the slowdown in March's performance compared to the previous months, the year-on-year performance comparison shows an improvement, as total new residential mortgage financing rose to SR8.59 billion, compared to SR7.84 billion in March 2024, an increase of 12.7%.
Real estate finance companies fall by 12.4%
In contrast, real estate finance companies continued to record a sharp decline in their performance, as the volume of financing provided by them amounted to only 197 million riyals, compared to 225 million riyals in March last year, a decrease of 12.4%.
Real estate finance companies continued to record a sharp decline in their performance.
Villas and apartments lead growth, land declines
In terms of qualitative breakdown, residential villa financing recorded a year-on-year growth of 5.1% to reach SAR 5.25 billion, while apartment financing jumped by 6.1% to reach SAR 2.89 billion.
Financing for the purchase of residential land continued to decline, recording a 12.4% decline to only 443 million riyals, compared to 509 million riyals in March 2024, the lowest level in 3 months.
Contracts fall. And higher funding per beneficiary
Despite the increase in the value of funding, the number of contracts concluded decreased slightly, as 10,945 contracts were recorded during March 2025, compared to 10,592 contracts in the same month last year, a decrease of 1.8%.
Despite the increase in the value of funding, the number of contracts concluded decreased slightly.
This decline suggests that individuals may be moving towards larger financings per contract, which may reflect either rising property prices or a move towards higher market value units.
This decline suggests that individuals may be moving towards larger financings per contract, which may reflect either rising property prices or a move towards higher market value units.
