Saudi Arabia’s real estate sector is set to soar as a new tripartite partnership aims to revolutionize housing finance and establish a thriving secondary mortgage market.
Strategic Collaboration to Strengthen Mortgage Market
The Real Estate Development Fund, Saudi Real Estate Refinance Co. (SRC), and Al-Ahli Bank signed a memorandum of understanding (MoU. This move, under the patronage of Minister Majid Al-Hogail, aims to enhance the Kingdom’s housing sector. It also seeks to develop a robust secondary mortgage market to drive financial growth.
The agreement includes SRC, fully owned by the Public Investment Fund, and Al-Ahli Bank. Together, they aim to create mortgage portfolios refinanced through SRC. This partnership will enable the fast-tracking of mortgage-backed securities, both locally and globally, ensuring a sustainable financing system.
Mortgage Market on the Rise
Saudi Central Bank data reveals residential mortgages totaled SR60.92 billion in the first nine months of 2024. This reflects a 4.88% increase compared to the same period last year, with home purchases accounting for 64% of the total.
Demand for apartments surged, with mortgages for apartment purchases rising 26.8% to SR18.6 billion. Loans for land purchases also grew, highlighting continued interest in real estate investments across the Kingdom.
Supporting Saudi Vision 2030
At the signing ceremony, Al-Hogail unveiled a new financing offer from Al-Ahli Bank, with competitive rates starting at 2.59%. The initiative aligns with the “Sakani” program and Saudi Vision 2030, aiming to improve housing accessibility.
Mansour bin Madi, CEO of the Real Estate Development Fund, emphasized the partnership’s role in reducing financing costs for Saudi families. SRC’s CEO, Majeed Al-Abduljabbar, highlighted innovative solutions that enhance liquidity and expand property options.
Al-Ahli Bank CEO Tareq Al-Sadhan reaffirmed the bank’s commitment to fostering a dynamic housing sector. He stressed that the partnership will support Saudi Arabia’s broader economic diversification goals.
