The session, held under Al-Barrak’s chairmanship, focused on various issues related to the draft mortgage law such as financing real estate, control over funding agencies and lease schemes.

The draft mortgage law includes five statutes — a mortgage registration law that allows the use of mortgages in real property financing, including mortgage registration; an execution (enforcement) law that expands a judicial court’s authority to provide injunctive and declaratory relief, and enforce such orders; a financial leasing law that regulates the incorporation, activities, and governance of financial leasing companies; a real estate finance law that regulates the incorporation, activities and governance of companies engaged in real estate financing; and a control of finance companies law that regulates the incorporation, activities and governance of finance companies.

Shoura Council Secretary-General Dr. Muhammed Al-Ghamdi said the proposed law was approved by the council in 2008 and was sent to the Cabinet for approval. He added that since there are some differences of opinions on some of the bill’s important articles, the Cabinet returned it for review.

Al-Ghamdi said that the council had set up a special committee comprising six members to study it. “The committee has completed 12 sittings and it will soon present its report to enable the house to discuss the entire law by members which would allow them to make amendments, deletions and additions to the draft law.”

Following approval by the council, the secretary-general explained that the Cabinet will have a final look at the draft regulation before it is presented for royal assent.

He said that the implementation of the law will definitely boost the Kingdom’s real estate business and would pave the way for the construction of thousands of housing units throughout the country. He said that the new law would generate a lot of interest among citizens since individuals and businesses are keen to develop the Kingdom’s real estate sector.

The implementation of the Saudi mortgage law is expected to increase demand for housing by around 50 percent. According to a real estate expert, the enactment of the mortgage law is eagerly awaited, as it will help end users tackle their financing problems.

Saudi Arabia is one of several countries not affected by the world financial crisis and with its strong and buoyant economy holds excellent prospects for the booming real estate sector, he said.

“There was a slowdown (in real estate) in parts of the region, but we are least impacted by the financial crisis and are waiting for the mortgage system to come. Once the mortgage system is introduced, it can increase demand by 200,000 (housing) units per year,” he said, adding that there is plenty of potential since 60 percent of the Kingdom’s population is young.

“The Kingdom needs to spend about $180 billion by 2015 to build new homes,” according to a report from the National Commercial Bank.