Villas lead real estate financing
This decline comes in light of remarkable changes in the performance of various real estate sectors, as the data showed that new residential financing for individuals was distributed among three main sectors, led by villas, which accounted for the largest share of SAR 6.63 billion at the end of January, compared to SAR 8.12 billion in the previous December, thus recording a clear decline in financing values.
Villas. As for apartments, the volume of real estate financing directed to them amounted to about 3.35 billion riyals at the end of January, compared to 3.48 billion riyals at the end of December, while the land sector witnessed an increase in financing to about 475 million riyals at the end of January, compared to about 335 million riyals in the previous month, which reflects an increasing interest in this type of real estate investments.
The number of real estate financing contracts declined
With regard to the number of contracts concluded, the market witnessed a decline during January 2025, as the total contracts amounted to about 13.411 thousand contracts, compared to 15.294 thousand contracts last December, indicating a relative lull in the demand of individuals for real estate financing at the beginning of this year.
Despite the noticeable decline in the volume of new residential real estate financing for individuals, SAMA data showed an increase in the total real estate loans provided by commercial banks, which amounted to about 883.27 billion riyals at the end of the fourth quarter of 2024, compared to about 846.48 billion riyals at the end of the third quarter of the same year.
These loans were distributed between individuals and companies, where the volume of real estate loans directed to individuals reached about 681.24 billion riyals at the end of the fourth quarter, compared to 656.88 billion riyals in the third quarter, while real estate loans to companies witnessed a significant jump to reach 502.03 billion riyals in the fourth quarter, compared to about 189.59 billion riyals in the third quarter, in an indication of increased financing directed to investment and commercial real estate projects.
Real estate loans to companies jumped to 502.03 billion riyals in the fourth quarter, compared to about 189.59 billion riyals in the third quarter.
Decreased performance of finance companies
At the level of financing companies, Central Bank data showed a limited decline in the volume of new residential real estate financing provided to individuals by financing companies, which decreased by 4.6% during January 2025, reaching 224 million riyals compared to about 235 million riyals in December 2024.
The data revealed that residential real estate financing provided by financing companies was also distributed among the three sectors, as the volume of financing directed to villas amounted to about 38 million riyals in January, compared to about 110 million riyals in December, while financing directed to apartments increased to 157 million riyals compared to 112 million riyals in the previous month, while land financing increased to 29 million riyals in January, compared to about 13 million riyals in December.
Data revealed that the volume of residential real estate financing provided by financing companies was also distributed among the three sectors.
Despite the decline in the volume of financing, the number of financing contracts concluded through financing companies increased slightly to 280 contracts during January 2025, compared to 262 contracts in December 2024, reflecting continued demand despite the relative decline in the value of financing.
In total, the total number of financing contracts increased to 29 million riyals in January, compared to about 13 million riyals in December. In total, total mortgage financing provided by finance companies during the fourth quarter of 2024 amounted to about SAR 690 million, compared to about SAR 556 million in the third quarter, reflecting a remarkable growth in real estate financing activities through these companies despite the challenges witnessed by the market.
Which reflects the continued demand despite the relative decline in the value of financing.
