The real estate finance market in Saudi Arabia recorded a significant decline in the volume of new residential financing provided to individuals by banks during August 2025, falling by 8.6% compared to July of the same year, according to the statistical bulletin issued by the Saudi Central Bank.

.

The data showed that the total new residential mortgage financing provided by banks to individuals amounted to about 5.86 billion riyals by the end of August, compared to 6.42 billion riyals in July, reflecting a decline in real estate lending activity during this period. The data showed that the total new residential mortgage financing provided by banks to individuals amounted to about 5.86 billion riyals at the end of August, compared to 6.42 billion riyals in July, reflecting a decline in mortgage lending activity during this period.

Real estate financing distributions

<According to the bulletin, financing was distributed across three main sectors: villas, apartments, and land. Villas retained the largest share of financing with a value of 3.74 billion riyals in August, compared to 4.11 billion riyals in July. Financing for apartments amounted to SAR 1.76 billion compared to SAR 1.93 billion in the previous month, while financing for land recorded a slight decrease to SAR 357 million compared to SAR 371 million in July.

On a year-on-year basis, villas retained the largest share of financing with a value of SAR 3.74 billion in August, compared to SAR 4.11 billion in July. <On an annual basis, total new residential mortgage financing decreased by 11.2%, reaching SR5.86 billion in August 2025, compared to SR6.6 billion in August 2024. Financing for villas fell from 3.79 billion riyals to 3.74 billion riyals, and financing for apartments fell from 2.45 billion riyals to 1.76 billion riyals, while land financing fell from 362 million riyals to 357 million riyals during the same period.

<Analysts believe that this decline reflects a temporary slowdown in the demand for real estate financing, in light of improved supply levels and the variety of housing options offered in the market, as well as banks tightening their credit policies in line with financial stability trends. The government's housing subsidy programs, in cooperation with banks and financing entities, are expected to boost demand in the coming months by offering more flexible and competitive financing solutions to Saudi families.