$800 million deal to boost Saudi home ownership

Under Vision 2030, Saudi Arabia aims to increase homeownership to 60 percent by the end of this year. (SPA file photo)
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Updated 20 July 2020

$800 million deal to boost Saudi home ownership

  • Moves to increase homeownership in the past have faced challenges because of the comparatively low level of mortgage provision in Saudi Arabia

DUBAI: A multimillion-dollar mortgage financing deal signed on Sunday is expected to fuel the drive toward increased Saudi homeownership, a core pillar of the Vision 2030 strategy.

The Saudi Real Estate Refinance Co. (SRC), an arm of the Public Investment Fund, will acquire mortgages worth SR3 billion ($800 million) from the Public Pension Agency (PPA), one of the main providers of pensions to government and military personnel.

“This agreement will help the liquidity in the market and help us provide more mortgages to people to buy homes,” PPA Gov. Mohammed Al-Nahhas said.

Under Vision 2030, the Kingdom targeted an increase in homeownership to 60 percent by the end of this year, but it is believed to have surpassed that target. The aim is 70 percent by the end of the decade.

Moves to increase homeownership in the past have faced challenges because of the comparatively low level of mortgage provision in Saudi Arabia, compared with other big economies, and the fact that home purchases have relied to a greater extent than elsewhere on cash deals.

SRC Chief Executive Fabrice Susini said the scale of the agreement with PPA illustrated “our commitment to exploring different avenues to help the citizens of Saudi Arabia climb the housing ladder.”

He added: “The deal provides liquidity to the real estate financing market, which in turn is expected to bring lower prices and increase the number of mortgage originations.”

 

 


Iraq pledges full compliance with OPEC+ oil cuts

Updated 47 min 23 sec ago

Iraq pledges full compliance with OPEC+ oil cuts

  • Prince Abdulaziz bin Salman Al-Saud, the Saudi Arabian energy minister, and his Iraqi counterpart, Ihsan Ismail, reaffirmed their commitment to the cuts
  • Under tough economic pressure, Iraq had struggled to meet the full cuts, but Ismail promised to reach 100 percent this month

DUBAI: Iraq has pledged to meet in full its obligations under the OPEC+ oil production cuts that have been credited with rebalancing global crude markets after the mayhem of April’s “Black Monday” when prices crashed around the world.

In a telephone call between Prince Abdulaziz bin Salman Al-Saud, Saudi Arabian energy minister, and his Iraqi counterpart, Ihsan Ismail, the two men reaffirmed their commitment to the cuts, which have helped to pull the oil price back from historic lows.

Brent crude, the global benchmark, has more than doubled in the past three months.

Under tough economic pressure, Iraq had struggled to meet the full cuts, but Ismail promised to reach 100 percent this month. Iraq has now committed itself to an ambitious program of compensation to make up for past overproduction.

Iraq will further reduce production by 400,000 barrels per day this month and next, Ismail said, bringing its total cut to 1.25 million barrels daily. That level of cuts could be adjusted when final estimates of compliance are assessed by the six “secondary sources” that monitor OPEC+ output.

“The two ministers stressed that efforts by OPEC+ countries toward meeting production cuts, and the extra cuts under the compensation regime, will enhance oil market stability, help accelerate the rebalancing of global oil markets, and send a constructive signal to the market,” a joint statement added.

Prince Abdulaziz thanked Ismail for his efforts to improve Iraq’s compliance with the agreement.

Iraq had been the biggest laggard in the move toward 100 percent compliance by the 23 members of the OPEC+ alliance.

Officials in Riyadh told Arab News that Iraqi compliance had reached about 90 percent, a high level by the country’s previous standards but still short of the new targets.

Saudi Arabia has been forcefully advocating full compliance with the targets in an effort to remove oil from the global market as demand is still badly affected by the economic fallout from the COVID-19 pandemic.

The oil market will be under the spotlight later this month when the joint ministerial monitoring committee of OPEC+ energy ministers convenes virtually in the most recent of the monthly meetings set up to oversee the state of the global industry.

Oil had another strong week on global markets, breaking through the $45 barrier for the first time since early March on signs that the glut in US oil stocks was easing, as well as reductions in the amount of “floating crude” stored in tankers on the world’s oceans.

The price spiked on news of the Beirut explosion, which some analysts believed could herald a deterioration in regional security and a threat to oil exports.

Brent crude was trading at $44.70 on international markets.