RIYDAH: Real estate lending to retail customers in Saudi commercial banks jumped 6.8 percent to SR476 billion ($127 billion) in the first quarter of 2022, from SR446 billion in the fourth quarter of 2021, according to a recent monthly report from the Saudi Central Bank.
As for the year-on-year growth, the retail real estate loans witnessed a 41.4 percent increase from 2020 to 2021 — where loans rose from SR315 billion to SR476 billion. This compares to just 8.7 percent growth in real estate loans Saudi banks provided to corporate customers.
Looking at the quarterly data, retail real estate loans witnessed a 33 percent increase from the first quarter of 2021 to the first quarter of 2022, compared to 11 percent for the corporate segment.
This change reveals retail consumers’ increased interest in purchasing real estate properties.
The highest change over the past four quarters was a 7 percent increase quarter-on-quarter, which took place between the transition from the third quarter to the fourth quarter of 2021, according to data compiled by Arab News.
Although growth remained positive in the first quarter of 2022, the pace of growth slowed by 1.2 percentage points compared to the fourth quarter of 2021.
Moving forward, the share of total real estate loans provided by Saudi banks to their retail and corporate customers as a percentage of total bank credit is expanding on a quarterly basis, as it can be observed through the past four quarters. More consumers are willing to spend their bank credit loans on buying real estate.
From its value in the first quarter of 2021 of 26.3 percent, it increased to 27 percent in the second quarter of 2021. Similarly, it grew to 27.8 percent from the second to the third quarter, showing a very consistent change in its share contribution.
The only higher change in share contribution — an increase of 1.3 percentage points — was observed during the transition from the third quarter to the fourth quarter of 2021.
Finally, it maintained incremental growth of 0.4 percentage points from the fourth quarter of 2021 to the first quarter of 2022.
Looking at the SAMA data, one could conclude that more Saudi consumers — especially in the retail segment — have been willing to take out bank loans for real estate purchasing opportunities.