Saudi Arabia's real estate finance sector recorded significant growth through 2024, driven by low interest rates and increasing demand for home ownership.
Data released by the Saudi Central Bank (SAMA) showed that the volume of new residential mortgage financing provided to individuals by banks rose to 91.0 percent in 2024. Data released by Saudi Central Bank (SAMA) showed that the volume of new residential real estate financing provided to individuals by banks rose to SR91.1 billion, an increase of 17% compared to 2023.
Data released by Saudi Central Bank (SAMA)
December is the highest funded since 2022
In terms of monthly real estate financing, December 2024 saw the highest financing value during the year, reaching SAR 11.94 billion, the highest level since August 2022.
December 2024 saw the highest financing value during the year, reaching SAR 11.94 billion, the highest level since August 2022.
The impact of interest rate cuts on financing growth
This growth came as the Saudi Central Bank cut its reverse repo and repo rates three times over the past year to 450 and 500 basis points, respectively, in line with the decisions of the US Federal Reserve.
In line with the decisions of the US Federal Reserve.
Increase in the number of contracts and decrease in average loans
According to SAMA data, the total contracts concluded between banks and individuals during 2024 amounted to 122.3 thousand contracts, while the average value of new real estate financing reached 744.6 thousand riyals, compared to 755.9 thousand riyals in 2023.
Villas top financing options
Residential villas accounted for the largest share of the total residential real estate financing provided by banks, amounting to SAR 58.3 billion, representing 64% of the total financing. Apartments ranked second with SAR 28.1 billion, followed by land worth SAR 4.7 billion.
Real estate financing from finance companies declined
In contrast, the volume of new residential real estate financing provided to individuals by finance companies decreased by 16% to reach 2.57 billion riyals in 2024, reflecting the decline in reliance on these entities compared to banks.
This growth comes as the volume of new residential real estate financing provided to individuals by finance companies decreased by 16% to reach 2.57 billion riyals.
This growth in real estate financing comes in light of the Kingdom's efforts to promote homeownership, in line with the targets of Vision 2030 to raise the homeownership rate to 70%.
Villas top financing options
Residential villas accounted for the largest share of the total residential real estate financing provided by banks, amounting to SAR 58.3 billion, representing 64% of the total financing. Apartments ranked second with SAR 28.1 billion, followed by land worth SAR 4.7 billion.
Real estate financing from finance companies declined
In contrast, the volume of new residential real estate financing provided to individuals by finance companies decreased by 16% to reach 2.57 billion riyals in 2024, reflecting the decline in reliance on these entities compared to banks.
This growth comes as the volume of new residential real estate financing provided to individuals by finance companies decreased by 16% to reach 2.57 billion riyals. This growth in real estate financing comes in light of the Kingdom's efforts to promote homeownership, in line with the targets of Vision 2030 to raise the homeownership rate to 70%.
