The Saudi Real Estate Refinancing Company has signed its first strategic refinancing partnership agreement, worth one billion riyals, with Deutsche Gulf Finance, a leader in the housing finance sector, This agreement is the first of its kind for the Saudi Real Estate Refinancing Company as part of its strategic plan aimed at revitalizing the housing finance sector by enabling lenders to offer financing solutions that are better suited to the needs of prospective homeowners.
His Excellency the Minister of Housing, Mr. Majid bin Abdullah Al-Hogail, said in a speech delivered during the signing of the agreement: “This is a positive step toward achieving our goal of revitalizing the housing finance sector and increasing the homeownership rate among citizens. This type of cooperation and partnership is the foundation of what Vision 2030 aims to build as we develop and diversify our economy.”
In this regard, Fabrice Susini, CEO of the Saudi Real Estate Refinancing Company, said: “This agreement is the first in a series of agreements we will sign to increase liquidity for lenders, who will in turn provide more financing solutions to Saudi individuals.” Sussini added: “Our role boils down to enabling individuals to obtain the financing they need to own their own homes.”
The new agreement provides short-term financing as well as the purchase of a portfolio of housing loans, and this transaction will enable Deutsche Gulf Finance to offer diverse, innovative, and Sharia-compliant financing solutions, representing one of the steps aimed at increasing the homeownership rate among Saudis.
Suleiman Al-Zabin, CEO of Deutsche Gulf Finance, stated: “We at Deutsche Gulf Finance are pleased to have been selected by the Saudi Real Estate Refinancing Company to sign the first refinancing partnership agreement, which strengthens cooperation between the public and private sectors and advances the goals of the Kingdom’s Vision 2030, as our aspirations align with increasing homeownership rates, reducing financing costs, and increasing liquidity for the largest number of citizens.”
This agreement comes as part of the Ministry of Housing’s ongoing efforts to develop mortgage financing solutions that benefit prospective homeowners, thereby promoting the growth of the real estate market.
It is worth noting that the Saudi Real Estate Refinancing Company, owned by the Public Investment Fund, was established this year with the aim of creating a secondary housing finance market, This market consists of all operations in which the Saudi Real Estate Refinancing Company acts as an intermediary between lenders and investors, with the company acquiring housing finance portfolios and converting them into sukuk traded on local and global financial markets.
It is worth noting that the Saudi Real Estate Refinancing Company works alongside public and private sector institutions to help achieve the housing goals outlined in Saudi Vision 2030, as one of the vision’s objectives is to raise the homeownership rate to 52% by 2020 through the development of the housing finance sector and increasing its contribution to the gross domestic product.
As the company works to enable lenders to offer more diverse financing solutions to a larger segment of the population, the housing finance sector is expected to grow from 280 billion riyals this year to 500 billion by 2020.
