real estate loans in Saudi Arabia continue to record unprecedented growth rates, rising significantly in the third quarter of 2024, reaching a historic high. This growth reflects the great strength of the Saudi real estate sector and confirms the continued growing demand from individuals and companies for real estate financing, at a time when the real estate market is witnessing further stabilization and development.
According to data from the Saudi Arabian Real Estate Regulatory Authority (SARA). <According to data from Saudi Central Bank, real estate loans granted by commercial banks in Saudi Arabia by the end of the third quarter of 2024 recorded an increase of 13.29% year-on-year, equivalent to SR99.28 billion compared to the end of the same quarter last year, as the volume of cumulative real estate loans reached SR846.48 billion, the highest historical level of these loans since data recording began, compared to SR747.2 billion in the same period of 2023.
This is an increase in the volume of real estate loans granted by commercial banks in the Kingdom of Saudi Arabia at the end of the third quarter of 2024. This increase is a strong indicator of growing economic activity and reflects the growing confidence in the Saudi real estate sector, whether at the individual or corporate level.
Mortgage loans rose significantly quarter-on-quarter
Quarter-on-quarter, real estate loans granted by commercial banks in the Kingdom increased by 3.9% by the end of the third quarter of 2024, compared to the previous quarter of the same year, as the value of loans at the end of the second quarter of 2024 reached 814.65 billion riyals. Thus, in the third quarter, commercial banks added 31.84 billion riyals to the total value of real estate loans granted.
Significant increase in individual and corporate loans
During the first nine months of 2024, the total value of real estate loans granted by commercial banks to individuals and companies amounted to 79.21 billion riyals, an increase of 10.3% compared to the same period last year, which was 767.27 billion riyals in the fourth quarter of 2023.
These loans were distributed as follows: Individuals received 49.66 billion riyals from commercial banks in the Kingdom, while companies received 29.55 billion riyals.
Real estate loans granted to individuals amounted to 607.22 billion riyals by the end of 2023, while corporate loans amounted to 160.05 billion riyals.
Individuals capture the largest share
Individuals accounted for the largest share of the total real estate loans granted by commercial banks in the Kingdom, amounting to 656.88 billion riyals by the end of the third quarter of 2024, equivalent to 77.6% of total real estate loans. This value witnessed a significant increase of 65.18 billion riyals, a growth of 11.01% compared to the value in the same period last year, which amounted to 591.7 billion riyals.
On a quarterly basis. <On a quarterly basis, real estate loans granted to individuals in the third quarter of 2024 increased by 2.7% compared to the second quarter of the same year, as the value of loans granted to individuals at the end of the second quarter was 639.53 billion riyals. Thus, the total real estate loans granted to individuals in the third quarter amounted to 17.36 billion riyals.
Strong increase in corporate loans
As for companies, real estate loans granted to them also witnessed remarkable growth, reaching SAR 189.6 billion by the end of the third quarter of 2024, compared to SAR 155.5 billion in the same period last year, an increase of SAR 34.1 billion, a growth rate of 21.9% year-on-year.
On a quarter-on-quarter basis, real estate loans granted to companies increased significantly.
Quarter-on-quarter, real estate loans to companies increased by 8.3% in the third quarter of 2024, as the value of loans to companies at the end of the second quarter of the same year was 175.12 billion riyals, equivalent to an increase of 14.48 billion riyals.
Continuous growth since 2016
The volume of real estate loans in Saudi Arabia has witnessed continuous growth since 2016, rising from SR200.4 billion at the end of 2016 to SR210.99 billion in 2017, then to SR238.54 billion in 2018, reaching SR297.37 billion in 2019.
With the beginning of the impact of the Corona pandemic in 2020, total real estate loans increased to 428.41 billion riyals, then this growth continued to reach 568.86 billion riyals at the end of 2021, and 687.83 billion riyals in 2022, reaching 767.27 billion riyals by the end of 2023.
<This data reflects the continued increase in demand for real estate financing in Saudi Arabia, reflecting the strength and stability of the Saudi real estate sector and its ability to grow and expand. This trend is expected to continue with the continuation of government programs aimed at supporting the real estate market and encouraging citizens to own property, making the real estate market in the Kingdom one of the most promising economic sectors in the future.
