S&B: Provide financing support the momentum of housing in Saudi Arabia

S&P Global Retins expected the momentum to continue in the Saudi House Market this year, driven by the expansion of real estate financing and the improvement of lending conditions, despite the high prices of housing in the major cities. A recent report by the agency showed that the new real estate financing issued by the banks in the kingdom recorded the 17% growth during the year 2024 to reach about 91 billion rows, after recorded a slowdown over the past two years. The report attributed the increase in demand for real estate loans to the central bank of interest rates has reduced 100 basis points, and the initiatives to ensure real estate financing for low -income citizens, such as the Saudi housing business for housing services, “guarantees” supported by the government. The increase in the number of projects on the map will also increase the demand for mortgage loans. The report confirmed that the government will remain the most important driving force for the growth of the demand for real estate, in light of the targets that the ownership of Saudis is reaching to 70% by 2030. This reached 65.4% in 2024, in addition to financing citizens. An expected increase in real estate transactions The agency has suggested that the value and size of real estate transactions additional relationships during the 2025 be driven by a strong demand for major cities, and the possibility that the impact of a law owned by foreigners will begin from this year. The value of real estate transactions increased by 35% last year to score 164.8 billion Riyals, and its volume increased by 38% to 200 thousand transactions. In terms of prices, the report expects the high costs associated with owning housing will lead to changing consumer preferences, giving the opportunity to transform the sector. According to the report, the residence in apartments instead of villas and independent homes became more socially acceptable. The preferences of buyers also looked at buying homes on the map through real estate financing instead of getting ready for homes. Supporting procedures and the challenges of the list that the agency noted have noted that the measures, similar to the government that allows some countries to housing at reasonable prices annually, and stimulate fees on unpaid countries, the development activities, which increase the supply of housing and control prices. The government has partnered with developers to launch projects in the kingdom. The total residential offer in the five major cities, Riyadh, Jeddah, Dammam, Mecca and Medina, reached 3.5 million dwelling units in 2024. And based on the analysis of “Knight Frank”, this number is expected to reach approximately 3.9 million units by the end of 2028. Sector its momentum, including the slowdown in economic growth and high inflation, and more importantly, increased oil prices. But it is more likely that the growth of the population of the kingdom is linked to the ‘vision of 2030’, and the lack of offer in the most important urban centers to continue to feed the market.