Residential real estate financing for individuals in Saudi Arabia recorded a significant increase during the current year, coinciding with the expansion of banks in lending, as well as government programs to enable home ownership.
Residential financing for individuals in Saudi Arabia recorded a significant increase during the current year, coinciding with the expansion of banks in lending, as well as government programs to support home ownership.
New housing finance growth
Data released by the Saudi Central Bank (SAMA) confirmed that the residential mortgage finance sector for individuals in Saudi Arabia witnessed remarkable growth during the first quarter of 2025, after the value of new financing reached SAR 36.2 billion, recording an increase of nearly 20% compared to the same period last year, while the number of new housing finance contracts increased to 28,477 contracts, which reflects the remarkable increase in demand for residential ownership solutions, especially in major cities that witness rapid urbanization activity.
New financing growth.
Improvement reinforces the upward trend
The data showed that the value of financing recorded a strong performance during the month of April, as the value of new housing financing for individuals reached 6.3 billion riyals, up about 18% year-on-year, while the number of contracts during the month reached 8,200 contracts, in conjunction with the high demand for ready-made housing units and modern projects.
The annual data indicates that the value of financing recorded a strong performance during the month of April. The annual data indicates that the total residential real estate financing for individuals during 2024 amounted to 91.1 billion riyals, a growth rate of 17% compared to 2023, the highest levels in recent years, which confirms the continued expansion of the sector and the high lending capacity of banks.
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Villas top financing options
Some economic reports indicate that villas accounted for the largest share of the financing volume during March 2025 with a value equivalent to 5.18 billion riyals, followed by apartments worth 2.8 billion riyals, then land worth 415 million riyals, and these figures confirm a change in the orientation of families towards ready-made housing, and a recovery in major residential projects.
Despite the strong growth in the number of villas, villas have taken the largest share of the financing volume during March 2025 with a value equivalent to 5.18 billion riyals. Despite the strong growth witnessed by the sector, the data showed a relative decline in performance during some months, explaining that real estate financing for individuals decreased in May 2025 to 7.4 billion riyals compared to the same period a year ago, reflecting the possibility of the market being affected by lending controls or demand fluctuations, as some specialists believe that this fluctuation is a natural part of the market cycle, but the general trend still indicates stable growth.
Some specialists believe that this fluctuation is a natural part of the market cycle, but the general trend still indicates a stable growth.
Future outlook for the sector
Analysts expect retail mortgage growth to continue through 2025 as government housing subsidy programs continue, banks expand the availability of financing products, and the supply of new housing projects increases. The sector is expected to maintain a balanced pace of growth, with the possibility of new regulatory controls aimed at enhancing the quality of lending without affecting the ownership movement.Analysts expect the sector to maintain a balanced pace of growth, with the possibility of new regulatory controls aimed at enhancing the quality of lending without affecting the movement of ownership.
