Housing Minister Majid Al-Hogail revealed that the ministry is currently working to study new financing policies for the coming phase to revitalize cities abandoned by Saudis, or through other financing policies to renovate homes there, noting that the off-plan sales rate stands at 3 % and that we are currently working to raise it to 50 %. He pointed out that the government may need to purchase land to implement various policies, explaining that the ministry has a policy of providing additional liquidity to the market through the Refinancing Company by injecting liquidity via the purchase of portfolios ranging from 50 to 69 billion riyals during 2020.
Al-Hogail confirmed that the ministry aims to increase the volume of real estate financing to 502 billion riyals by 2020, up from the current 290 billion, noting that there are currently 6.5 million housing units in the Kingdom valued at 2.5 trillion riyals.He added that efforts are underway to facilitate access to financing so that Saudi citizens" chances of obtaining it increase fivefold compared to the past, and that the government wants to boost activity in the real estate market as it seeks to revitalize its economy and is taking steps to reform the sector as part of the Kingdom’s Vision 2030.
During his participation in the Real Estate Development Fund conference held recently in Riyadh, Al-Hogail emphasized the Ministry’s policy of guaranteeing a down payment of 5% or offering affordable mortgages to those who lack the financial means.”Al-Hogail noted that the ministry, in cooperation with the Refinancing Company (SARK), is working to invest in sukuk to foster the growth and development of real estate financing. He added that the Kingdom’s loan default rate is the lowest globally, though he expects this rate to increase as the program targets a larger number of citizens. Al-Hogail noted that the real estate finance market grew by 29 % during 2017, explaining that agreements were signed with a number of real estate developers both inside and outside the Kingdom.
