The volume of new home financing for individuals in Saudi Arabia has risen significantly since the beginning of the year through October 2024, reflecting a growing trend towards home ownership. According to data from Saudi Central Bank (SAMA), the value of residential financing rose by 5.75% year-on-year, indicating significant momentum in the Kingdom's residential real estate sector.
Housing finance value and number of contracts rose
The total new housing finance provided to individuals by banks and finance companies amounted to 71.19 billion riyals during the first ten months of 2024, compared to 67.32 billion riyals in the same period last year, an increase of 3.87 billion riyals. The number of funded contracts increased by 9.6% to reach 96.39 thousand contracts, compared to 87.97 thousand contracts in the corresponding period of 2023.
The number of funded contracts also increased by 9.6% to reach 96.39 thousand contracts, compared to 87.97 thousand contracts in the corresponding period of 2023.
Banks lead the growth of housing finance
Banks in Saudi Arabia recorded a remarkable growth in financing residential contracts, as the total financing provided by banks increased by 6.5% during the first ten months of this year, reaching 69.06 billion riyals compared to 64.85 billion riyals in the same period of 2023, an increase of 4.21 billion riyals.
The number of contracts financed through banks increased by 10.4% to 93.86 thousand contracts compared to 85.04 thousand contracts in the same period last year.
The number of contracts financed through banks increased by 10.4% to reach 93.86 thousand contracts compared to 85.04 thousand contracts in the same period last year.
Financing details by property type
The facilities granted by banks for the purchase of real estate during the mentioned period varied:
- Purchase of villas: The value of financing amounted to 43.67 billion riyals.
- Purchase of apartments: Financing amounted to SAR 21.44 billion.
- Land Purchase: 3.93 billion riyals.
- Purchase of villas: SAR 649 million.
- Purchase of apartments: 687 million riyals.
- Land purchases: 181 million riyals.
Performance of finance companies: Decline in overall performance
In contrast to the performance of banks, housing finance provided by finance companies saw a decline of 13.64% during the first ten months of 2024. The value of financing provided amounted to 2.13 billion riyals compared to 2.47 billion riyals in the similar period last year.
The value of financing provided amounted to 2.13 billion riyals compared to 2.47 billion riyals in the similar period last year.
The following is the distribution of financing by property type:
The number of contracts financed by finance companies decreased by 6.43%, with 1.79 thousand contracts financed compared to 1.913 thousand contracts in 2023.
The number of contracts financed by finance companies also decreased by 6.43%, with 1.79 thousand contracts financed compared to 1.913 thousand contracts in 2023.
October performance: Significant growth in some indicators
During October 2024, 11.02 thousand contracts worth 8.14 billion riyals were financed by banks and finance companies, an increase of 20.33% compared to the same month last year.
At the level of finance companies only, the number of contracts financed during the month amounted to 298 contracts worth 254 million riyals, the same volume of financing compared to October 2023.
The number of contracts financed during the month amounted to 298 contracts worth 254 million riyals.
Growth reflects the development of the real estate sector
This data reflects the strong performance of Saudi Arabia's residential real estate finance sector through 2024, supported by continued growth in the number and value of contracts, especially by banks. Despite the decline in the performance of finance companies, the real estate market remains an attractive destination for investments, contributing to the Kingdom's Vision 2030 goals of expanding the home ownership base.
