New residential real estate financing for individuals provided by banks and financing companies recorded a jump during the first half of 2021 by 27.3%, and financing by banks rose to about 77 billion riyals, compared to 59.74 billion riyals by the end of the first half of last year; to rise by 28.9%.
This recovery in the housing finance market comes in light of a general recession hitting the real estate sector in most countries of the world, and this confirms the strength of the Saudi economy, which succeeded in overcoming the effects of the pandemic, and the statistics show us the fruits of the great support and attention provided by the leadership to this sector.
We emphasize that continuing to provide housing and financing solutions, including the subsidized mortgage loan in cooperation with banks and financial institutions to buy ready-made housing units under construction or self-construction for those who own land, and the reservation of residential lands within the “Sakani” program, are all factors that strongly help revive the housing finance sector and increase confidence in transactions between financing institutions and beneficiaries.
We also note that the total number of contracts financed for the purchase of new housing during the first half of this year rose to more than 153 thousand contracts, compared to 134 thousand contracts in the first half of last year 2020.
To reinforce our talk, we also cite the expectations of the International Monetary Fund, which confirmed the continued strong growth of residential mortgage lending in the Kingdom in light of government programs to support demand growth, enhance supply in the sector, and praise the role of government programs and regulations to improve the regulatory environment in increasing the ownership rate to 62% and increasing the housing supply to 334 thousand housing units in 2020, and finding digital solutions to accelerate the housing entitlement mechanism.
We also witnessed an increase in the value of residential mortgage financing 84% in 2020 to reach SAR 136 billion, and loans supported by government housing programs accounted for 96% of this value.
In light of the continued growth of mortgage lending at a steady pace supported by government programs and improving the regulatory environment for the housing market, we expect a continuous recovery in the financing market, which is the cornerstone of the supply and demand movement in the real estate market in general, and the residential sector in particular.
We are expecting a continuous recovery in the financing market, which is the cornerstone of the supply and demand movement in the real estate market in general, and in the residential sector in particular.
