RIYADH, 17June — Saudi British Bank and the Saudi Real Estate Company (Al-Akaria) have jointly launched “Al-Amanah Home Lease Program”, a unique product providing Saudi nationals the opportunity to acquire homes and residential properties through leasing. This is the first product of its kind in the Kingdom and is fully compliant with Shariah rules.
“Al-Amanah Home Lease Program, which ensures the sale of property to the tenant after the lease period, has been jointly launched following an agreement between the SABB and Al-Akariya,” said Abdulaziz Al-Manie, SABB’s senior manager for public affairs, here yesterday. This new program aims to help Saudis own houses by tapping the experience and the financial capabilities of these two leading organizations, he said.
The scheme is in response to increasing demand for housing, driven by rising population figures. Riyadh city alone will need 1.5 million additional housing units before 2022, when its population will exceed 10.5 million. The city’s population is growing at a rate of eight percent annually, according to statistics released by Arriyadh Development Authority.
The total area of Riyadh will also expand proportionately from 800 square kilometers to 1,800 square kilometers during the next decade.
Al-Manie said the new product had been developed and designed by SABB and Al- Akariya to meet the needs of a large segment of society. A range of residential properties including housing units and flats in various parts of the Kingdom will be now available on easy terms and conditions.
The Real Estate Development Fund (REDF), which extends loans covering 70 percent of the construction cost of housing units, is another agency that helps Saudis to own houses, said a report released by REDF here. The REDF currently offers two types of loans — private loan and investment loan. It has funded housing projects in over 3,415 cities and villages of the Kingdom.
Every Saudi citizen, the report said, is eligible to apply for the private loan, which should be used to finance the construction of a housing unit for residential purposes. The private loans represent about 99 percent of the REDF loans distributed so far and their total value is believed to be more than 96 percent of the total outlay.
The second type of loan is investment funding for commercial ventures, representing only four percent of the loans granted by the REDF. Intending to speed up the recovery of loans, the REDF has launched an incentive program for borrowers who pay back their loan installments on time.
A recent symposium attended by ministers, high-ranking officials, businessmen and international experts focused on a range of topics such as affordable housing based on new technology, developing and financing of real estate and planning for housing sector. A panel of experts from eight countries presented research papers at the event.
Another panel of senior experts from the leading commercial banks in the Kingdom talked about financial viability of housing projects in Riyadh.
The panelists said the city would witness a rapid growth in the housing sector within the next few years because 50 percent of the Saudi population are currently below the age of 15 years and will look for independent housing once they reach marriage age. The problem is further compounded by the huge influx of people to Riyadh from rural areas.
