Despite the continued strength of the Saudi banking sector, the latest analysis of Al Rajhi Financial reveals clear signs of a slowdown in real estate financing activity, raising important questions about the path of the real estate market in the coming period, especially in light of the decline in mortgage loans and changing lending behavior and residential demand.

The strength of Saudi banks" profits does not necessarily reflect a similar momentum in the real estate finance market, as housing and mortgage-related loans witnessed a noticeable slowdown during the last months of 2025, amid funding pressures and changes in demand.

Al Rajhi Financial explained that the strength of Saudi banks" profits does not necessarily reflect a similar momentum in the real estate finance market, as housing and mortgage-related loans witnessed a noticeable slowdown during the last months of 2025, amid funding pressures and changes in demand. <According to the report, bank credit growth slowed in November, which was directly reflected in real estate loans, which came under the category of personal loans. While there was limited monthly growth in this type of loan, annualized rates remained weak, indicating increasing caution from banks and borrowers alike.

According to the report, bank credit growth slowed in November, which was directly reflected in real estate loans, which came under the category of personal loans.

Mortgage loans fall

<Mortgage loans declined for the fourth consecutive month, reaching SAR 5.4 billion, a monthly and annual decrease, a level well below the annual average of SAR 8.6 billion. This decline reflects a sluggish demand for housing finance, whether as a result of higher borrowing costs or the postponement of purchase decisions by individuals and investors.

On the other hand, the report showed that the stabilization of bank deposits, especially time deposits, enhances the ability of banks to continue financing the real estate sector in the medium term, but the channeling of this liquidity is still subject to risk and return assessment, in light of the slowdown in real estate loans compared to previous years.

The decline in consumer spending and the change in people's priorities have contributed to the slowdown in real estate demand, especially in the loan-financed housing market, which forces real estate developers to reassess their pricing and offering strategies and rely more on flexible financing solutions.

Real estate developers must reassess their pricing and offering strategies and rely more on flexible financing solutions. While Saudi banks remain in a strong financial position, the current real estate financing indicators reflect a transitional phase in the real estate market, characterized by caution and anticipation, waiting for new stimuli that may restore momentum to mortgage loans, whether by reducing financing costs or launching support programs that boost housing demand during the coming period.

While Saudi banks remain in a strong financial position, the current real estate financing indicators reflect a transitional phase in the real estate market, characterized by caution and anticipation.