Data from the Saudi Central Bank “SAMA” revealed a decline in the volume of new housing financing provided to individuals in the Kingdom of Saudi Arabia during the past year, 2023; amounting to 42.57 billion riyals, compared to the results for 2022, representing a decrease of 34.5%.
The latest data released by “SAMA” that the value of new housing financing provided to individuals in the Kingdom by banks and finance companies reached 80.81 billion riyals last year, compared to 123.38 billion riyals recorded in 2022.
Villas accounted for the largest share of financing
The data also indicated that financing facilities provided for villas accounted for the largest share of the real estate financing market, with 54.5 billion riyals in financing facilities provided for the purchase of villas in 2023.
Meanwhile, real estate financing provided last year for the purchase of apartments totaled 21.72 billion riyals, compared to 4.58 billion riyals in financing for land purchases during the same period.
Decline in the Number of Financing Contracts
It clarified that the number of contracts financed in 2023 decreased by 32.5%, representing a decrease of approximately 51,370 contracts year-over-year, bringing the total number of financed contracts to 106,450, compared to 157,820 contracts financed in 2022.
Similarly, new residential financing for individuals provided by banks in the Kingdom declined by 35.36% last year to 77.74 billion riyals, compared to 120.27 billion riyals in the same period of 2022—a decrease of 42.53 billion riyals.
The number of contracts financed by banks during this period also declined by 33.4% to 102,850 contracts, compared to 154,390 contracts financed in 2022. Similarly, the value of housing financing provided by finance companies decreased by 0.65% in 2023 to 3.06 billion riyals, compared to 3.08 billion riyals in 2022.
Data from the Saudi Central Bank showed that finance companies provided financing facilities for more than 3,600 contracts in 2023, compared to 3,430 contracts financed in 2022, representing an increase of 4.66%.
The volume of new residential financing for individuals in the Kingdom also declined by 1.95% last December, on a year-over-year basis, reaching 6.51 billion riyals, compared to 6.64 billion riyals in the same month of the previous year, 2022.
Meanwhile, the value of real estate financing provided by banks stood at 6.24 billion riyals in December 2023, compared to 6.36 billion riyals in December 2022, representing a decline of 1.88%. Meanwhile, financing from companies amounted to 272 million riyals, compared to 280 million riyals in the same month of the previous year, marking a decline of 2.86%.
Conversely, the number of contracts financed in December 2023 rose by approximately 8,990 contracts, compared to 8,630 contracts in the same month last year, an increase of 4.17%, equivalent to 360 contracts.
