Saudi mortgage lending picks up in July

Saudi mortgage lending picks up in July
The slow down in the summer months of this year for new mortgage did not affect the overall growth this year. (File/Shutterstock))
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Updated 31 August 2021

Saudi mortgage lending picks up in July

Saudi mortgage lending picks up in July
  • Saudi new residential real estate financing contracts reached over 18,000 worth SR8.4 billion

RIYADH:  More Saudis have taken out new mortgages in July after a short slump in June, however, the total banks lending to the real estate sector is still higher in the first six months of this year compared to last year as the effects of the pandemic have eased, official data showed.

Saudi new residential real estate financing contracts reached over 18,000 worth SR8.4 billion for individuals in July, up from a month ago but down from the same month last year, Saudi central bank (SAMA) data showed. It's half of the value recorded at the beginning of this year.

The slow down in the summer months of this year for new mortgage did not affect the overall growth this year, with total real estate loans to corporate and individuals in Q2, up by 40 percent from a year ago, settling at SR503 billion. One reason for this is the focus of banks on lending more at home after they cut on the amount of money they had in assets abroad, the data showed. 

Khaled Al-Mobayed CEO of Menassat Reality Co., a Riyadh-based real estate developer, told Arab News that the reason for the growth in mortgage lending is due to growing demand for homes and continuation of governmental support being given to citizens through local banks. 

"Banks have a growing appetite for mortgage lending to citizens, who want the opportunity to own their own homes, and I think it's going to continue as long as governmental land support remains for the next three quarters," he said.

 Saudi banks lent SR85.397 billion for residential mortgages in the first seven months of 2021. Financial institutions lent SR2.267 billion for residential mortgages in the first seven months of 2021.

Saudi financial institutions and banks lent SR69.6 billion in the first seven months of the year for villas, while SR14.14 billion were lent for apartments.

Financing for residential villas amounted to 78 percent of the total financing at a value of SR6.7 billion during July. Residential apartments amounted to about 18 percent at about SR1.5 billion.