Slight decline in financing contracts
<According to the data, the volume of new real estate financing during August amounted to about 6.6 billion riyals. Despite this large figure, the number of mortgage contracts saw its lowest year-on-year growth, falling by 0.6% compared to the same period last year, reaching 9.1k contracts. This decline comes as the market prepares for a possible interest rate cut, reflecting the effects of economic variables on the real estate finance market.
Financing in July rose by 30%
Despite the decline in August, financings had risen significantly in the previous month (July), increasing by 30% year-on-year, the highest pace of growth recorded in 25 months. The discrepancy between the two months reflects the volatility in the real estate market, where financing is influenced by demand levels and interest rates.
54.1 billion riyals in real estate financing since the beginning of 2024
From the beginning of this year until the end of August, the total residential real estate financing provided to individuals amounted to about 54.1 billion riyals, representing an increase of 4% compared to the similar period last year. This rise in the volume of financing comes despite rising interest rates, indicating continued strong demand for residential real estate in the Kingdom.
Villas lead with 57%
Villa financing accounted for the largest share of total real estate financing, accounting for about 57% of the financing volume. The volume of financing for the purchase of villas amounted to about 3.8 billion riyals during the month of August. Financing for apartments accounted for 37% of the total, reaching a 22-month high of SAR 2.5 billion. As for land financing, it amounted to 362 million riyals, accounting for about 5% of the total real estate financing.
