Real estate loans provided by financial institutions were up 3.3% y-o-y at SAR 28 bn (USD 7.46 bn) in 3Q 2024, according to data from the Saudi Central Bank (Sama). The figure is an all-time high, according to Asharq Al Awsat. Retail real estate loans accounted for the lion’s share at SAR 22.9 bn, while the remainder (SAR 5.1 bn) were loans to corporations.

Mortgages are also on the rise: Total mortgage loans from commercial banks increased 13.3% during the period at SAR 846.5 bn (USD 225 bn). Retail mortgage loans increased 11% to SAR 657 bn, accounting for 77.6% of the total, while corporate mortgage lending rose 21.9% at SAR 189.6 bn.

A good year ahead for mortgages? The local mortgage financing market is projected to grow 12% y-o-y in 2025, on the back of robust demand for mortgages, Arbah Capital’s Senior Director of Asset Management Mohammed Al Farraj told Asharq Al Awsat. The growth is expected to be driven by lower interest rates, growing consumer confidence and purchasing power, government-backed housing policies, an increase in real estate products, and higher demand for housing, Al Farraj added.

IN CONTEXT- The government is rolling out policies — including buyer-friendly mortgages — as it looks to achieve a 70% home ownership target by 2030, but the Kingdom also needs to build out an additional 1.2 mn housing units by 2030 in order to meet that goal. Cityscape Global concluded in November with SAR 230 bn in real estate agreements, including SAR multi-bn investments by PIF-backed Roshn, the National Housing Company, and the Real Estate Development Fund to promote home ownership.

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