Last August, Saudi banks signed approximately 870 residential financing contracts for individuals per day, for a monthly total of 26,974 contracts with a total value of 12.994 billion riyals, after the number of contracts rose by 45.91% month-over-month between July and August, up from 18,486 financing contracts.

Recent data showed that housing financing granted to individuals rose significantly last month after recording low figures over the previous three months, during which the number of contracts ranged from 17,166 in May and 18,486 in July.

Apartments Lead Financing

The data showed that all categories of housing financing saw a monthly increase in August, with the highest increase in apartment purchase financing, which rose by 59.51% from 1.481 billion riyals to 2.362 billion riyals, while financing for villa purchases rose by 54%, increasing from 6.572 billion to 10.122 billion riyals. Land financing, meanwhile, had the lowest value and the smallest increase, rising by 47.8%, rising from 345 million to 510 million riyals, bringing the total increase in the value of financing contracts to 54.7%, up from 8.398 billion riyals to 12.994 billion riyals.

Annual growth in financing

Housing financing achieved modest annual growth in contracts on an annual basis, with the number of contracts rising by 0.91% between the second quarter of 2020 and the second quarter of 2021, increasing from 59,455 contracts to 60,018 financing contracts, with apartment financing leading the way, as its value increased by 36.91% from 3.646 billion riyals to 4.991 billion, while villa financing grew by 2.61% (TP3T), rising from 23.516 billion to 24.125 billion. Land financing decreased by 2.21% (TP3T), falling from 1 billion riyals to 1.147 billion, which affected the total volume of financing provided, which rose by 5.91% due to the modest growth in villa financing and the decline in land financing, bringing the total financing to 30.264 billion riyals, up from 28.561 billion riyals.

Personal loans double bank loans

The high demand from individuals for housing finance led to a 53.71% year-on-year increase in real estate loans granted to individuals, bringing the value of these loans to double that of loans granted to companies, with individual loans reaching approximately 250.287 billion riyals in the second quarter of 2020 and rising to 384.668 billion riyals in the corresponding quarter of 2021, Corporate loans, meanwhile, rose by 7.71% from 109.608 billion to 118.067 billion riyals, bringing the total increase in mortgage loans over the year to 39.7%, rising from 359.896 billion riyals to 502.735 billion riyals.