RIYADH: Saudi Real Estate Development Fund and Riyadh-based mortgage lender Bidaya Home Finance have signed an agreement which aims to provide affordable housing and financing solutions to real estate finance institutions and firms.
Signed by REDF CEO Mansour bin Madi and Bidaya’s acting CEO Faisal bin Abdul Rahman Al-Nasser, the agreement aims to provide short and medium-term financial facilities to propel the journey of beneficiaries owning a suitable home, the Saudi Press Agency reported.
The initiative falls in line with the goal of one of the Kingdom’s Vision 2030 programs, referred to as “Iskan Program”, to boost the percentage of homeownership to 70 percent by 2030.
The agreement also cements the fund's pioneering role in stimulating the real estate financing market by diversifying financing and housing options for “Sakani” beneficiaries, while ensuring that they have the proper financial ability to afford housing costs, Madi emphasized.
REDF plans to continue fostering effective partnerships with approved real estate finance entities and firms to further increase their contribution to the real estate financing market, its CEO highlighted.
This move is expected to raise shares in the residential real estate financing market which stimulates the mortgage market, supports the provision of financing options to beneficiaries, and creates innovative financing and housing opportunities, he explained.
The agreement poses a quantum leap in diversifying the financing portfolio at Bidaya to serve various segments of customers and beneficiaries, according to Al-Nassser.
Earlier this year, in August, REDF signed more than 58,000 financing contracts, offering various financing and housing options for housing support programs throughout the Kingdom during the first half of 2022.
These ongoing government implemented initiatives are reforming the housing market and improving access for Saudi families, according to a report from PwC Middle East last week.
Saudi Arabia’s housing demand stood at 99,600 houses in 2021 and is expected to increase by more than 50 percent to reach 153,000 houses by 2030.
In 2017, more than 1.6 million Saudi nationals were on waiting lists for government housing programs, prompting the development of the “Housing Program in 2018” with the objective of increasing access for Saudi families to suitable housing.
This initiative reaffirmed Saudi Arabia’s commitment to addressing challenges including population growth, rapid urbanization, an insufficient supply of affordable housing, and an unregulated self-build market.
The report identifies some of the key measures that had a positive impact on the Kingdom’s transformation, including access to finance.
Addressing the barriers created by a high mortgage interest rate environment, this critical dimension directly targets the challenge of unaffordable houses through several government-backed initiatives.