The Kingdom’s mortgage market is considered one of the lowest when it comes to delinquency—0.6 per cent/Bloomberg
by BloombergSaudi Real Estate Refinance Company aims to raise its holdings of home-loan portfolios by 10 times this year, as a government push to boost home ownership spurs lending.
Majed Al-Hogail, the Saudi Housing Minister, said that the Kingdom’s first mortgage refinancing firm—the state-owned equivalent of Fannie Mae and Freddie Mac in the US—plans to buy more than SAR 23 billion ($6.1 billion) of mortgage portfolios from banks in 2020.
The move is a sharp jump from the SAR 2.25 billion it held at the end of 2019.
The target reflects huge growth in mortgage lending as officials try to raise home ownership from 62 to 70 per cent by 2030, a goal of Crown Prince Mohammed bin Salman’s economic overhaul plan.
“We see more mortgage loans in the personal loans and that is all helping the whole market to move and close any shortage,” said Al-Hogail.
The government has taken a slew of measures to increase home construction and lending as it works to lift one of the world’s lowest mortgage penetration rates. For years, the absence of refinancing firms limited the ability of banks to expand their mortgage books amid regulatory limits on loans to any one sector. Saudi Real Estate Refinance Company was established in 2017.
Lawmakers have amended central bank rules and gave incentives to make it easier for Saudi homebuyers to access financing. The value of outstanding mortgages has jumped to SAR 482 billion—a 66 per cent increase since 2017—with an official target of SAR 500 billion by end-2020.
Al-Hogail dismissed concerns that the boom could be risky.
The Kingdom’s mortgage market is considered one of the lowest when it comes to delinquency—0.6 per cent, while that rate will increase, Saudis are committed to their loans; they’re very serious when it comes to liability, added Al-Hogail.
MOST READ
CPI Financial was established in Dubai in 1999 to meet the needs of an ever-expanding financial community, offering a comprehensive portfolio of market-leading products and services tailor-made for the banking and financial services sectors.
Loading More post
