SAMA hikes mortgage loan limit to 85 percent

Banks will now be permitted to lend buyers 85 percent of the value of a home, up from 70 percent. It will apply to purchases of first homes by Saudi citizens.
Updated 06 January 2017
0

SAMA hikes mortgage loan limit to 85 percent

DUBAI: The Saudi Arabian Monetary Authority (SAMA) said it would allow banks to supply a bigger share of funding for purchases of homes, as part of authorities’ drive to stimulate the real estate market and ease a shortage of affordable housing.
Banks will now be permitted to lend buyers 85 percent of the value of a home, up from 70 percent previously. That will apply to purchases of first homes by Saudi citizens.
The change will allow banks to offer a wider variety of products in the market without compromising the financial stability of the banks, the authority said.
Last March, SAMA raised the loan-to-value ratio to 85 percent from 70 percent for specialized mortgage companies but did not do so for banks. At the time, it said mortgage firms were more able to bear increased risk associated with the change because unlike commercial banks, depositors’ money was not at risk.


Xi urges financial risk prevention while seeking stable growth

Updated 27 min 19 sec ago
0

Xi urges financial risk prevention while seeking stable growth

  • China’s economy is growing at its slowest pace in almost 30 years
  • Preventing and resolving financial risks, especially systemic financial risks, is a fundamental task
BEIJING: China should seek stable development of its economy while not forgetting to fend off risks to its financial system, Chinese President Xi Jinping said, state news agency Xinhua reported on Saturday.
China’s economy is growing at its slowest pace in almost 30 years, spurring policymakers to bolster growth by easing credit conditions and cutting taxes.
“It is necessary to focus on preventing risks on the basis of steady growth, while strengthening the countercyclical adjustment of fiscal policy and monetary policy and ensuring that the economy operates in a reasonable range,” Xi said.
Preventing and resolving financial risks, especially systemic financial risks, is a fundamental task, the agency cited Xi as telling a study session for senior Communist Party officials on Friday.
On Wednesday, Premier Li Keqiang reiterated that China would not resort to “flood-like” stimulus such as it unleashed in past downturns.
But after a spate of weak data, investors are asking if Beijing needs to speed or boost support to reduce the risk of a sharper slowdown.
Until now, China has refrained from cutting benchmark interest rates to spur the slowing economy, which would ease financing costs but risk adding to a mountain of debt.
To free up more funds for lending to small and private businesses, the central bank has cut the reserves that banks need to set aside five times in the past year.
Last month, Chinese banks made the most new loans on record, a total of 3.23 trillion yuan ($481 billion). A central bank official said previously that no credit floodgate had been opened, and the lending jump showed recent easing steps were working.
China’s financial sector must serve the real economy, Xi said, but stable growth and risk prevention must be balanced.