Saudi banks extend $2.4bn in home loans in Feb.; demand broadens across nationals and expats
RIYADH: Saudi Arabia's banks issued SR8.91 billion ($2.37 billion) in new residential mortgages to individuals in February — a 28.33 percent annual increase, according to official data.
Figures from the Saudi Central Bank, also known as SAMA, show that apartment lending recorded the highest growth during this period, rising by 46.45 percent to SR2.9 billion.
While houses continue to dominate residential real estate financing with a 62.6 percent share, this is down from 65.24 percent in February 2024 as demand gradually shifts toward apartments.
House loans posted strong growth of 23.05 percent, reaching SR5.57 billion, yet land financing stayed modest at SR436 million, with a minimal increase of 0.61 percent.
This momentum comes as Saudi Arabia pushes toward its Vision 2030 target of achieving 70 percent home ownership.
Demand is being fueled by citizens and a growing expatriate population. A March report by Knight Frank revealed that 72 percent of Saudis and expats aspire to own homes, with the figure soaring to 93 percent among high-income citizens earning more than SR50,000 per month. Among expats, 77 percent now express a desire to buy property in the Kingdom.
Despite the strong demand, affordability remains a challenge, according to Knight Frank — particularly in cities such as Riyadh, where apartment prices have climbed 75 percent since 2019 and villa prices are up 40 percent.
To address this, Saudi authorities are rolling out a wave of regulatory and urban planning reforms. In March, the Royal Commission for Riyadh City and the Council of Economic and Development Affairs unveiled initiatives aimed at stabilizing prices and expanding access to homeownership.
These include lifting restrictions on land transactions and development in key zones of northern Riyadh, unlocking 81.5 sq. km of land for new housing and commercial projects.
At the time, Finance Minister Mohammed Al-Jadaan said the move was expected to reduce price volatility, with new plots priced at no more than SR1,500 per sq. meter and made available to Saudi citizens over the age of 25.
As part of its broader Vision 2030 strategy, Saudi Arabia has also been liberalizing real estate laws to attract more foreign investment, especially in fast-growing sectors such as tourism, housing, and special economic zones.
In 2024, officials confirmed that new regulations are underway to expand foreign ownership rights in strategic projects such as NEOM and the Red Sea.
While foreigners can already own residential property in specific zones and access 99-year leases according to the Real Estate Saudi platform, most residential mortgages are concentrated among Saudi nationals, supported by programs like Sakani and Dhamanat.
Foreign investment in Saudi Arabia's commercial real estate sector is subject to specific regulations and approval processes. Foreign investors are llowed to own real estate necessary for conducting their licensed business activities, including property for offices and employee accommodation, provided they obtain the requisite approval from the Ministry of Investment.
Additionally, for real estate intended for investment purposes — such as buying, selling, or leasing — the investment must meet a minimum threshold of SR30 million, with a commitment to develop the property within five years, according to the Saudi Embassy website in the US.
These measures ensure that foreign investments align with Saudi Arabia's broader economic objectives and development plans.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arab News
6 hours ago
- Arab News
SLS Expo 2025 propels Vision 2030 infrastructure goals
The three days of Saudi Light and Sound Expo 2025 reinforced the event's position as a central platform for advancing Saudi Arabia's professional lighting, sound, and AV technology sector. With broad international participation and a focus on actionable business outcomes, SLS Expo continues to support the Kingdom's Vision 2030 goals by accelerating infrastructure development and building strategic industry capabilities. Global and regional stakeholders convened to explore new solutions and partnerships essential to Saudi Arabia's growing live event production market. The exhibition featured 127 exhibitors from 21 countries, including Saudi Arabia, the UAE, US, China, and Italy, showcasing technologies designed for high-performance venues, immersive experiences, and large-scale productions. Several significant agreements were signed, contributing to Saudi Arabia's infrastructure and capability-building objectives. The MoU signing between Saudi Entertainment and Events Management Academy and IPS marked the beginning of a strategic partnership aimed at enhancing talent development in the live events sector in Saudi Arabia, aligning its goals with the Kingdom's Vision 2030. Additional MoUs formalized as the event progressed, reflecting the Kingdom's broader strategy to attract global expertise, foster local skills development, and support the execution of major national projects. At the heart of the show's programming was the SLS Summit, supported by sponsors IPS, Shure, Procom, Venuetech, Proloab, RST, SONOS, ShowPower and Media Pro. More than 40 international speakers delivered expert-led sessions across topics including smart production, sustainable AV, immersive design, and next-generation venue infrastructure. One of the standout sessions, Stadiums 2.0, explored how integrated AV systems and architectural design are enabling a new era of live event experiences. 'What we saw at SLS Expo was not just about momentum, it was focused, results-driven engagement that's shaping the sector's future,' said Sarkis Kahwajian, associate vice president at dmg events. 'The MoUs already confirmed, and those in development, speak to the depth of commitment across the public and private sectors.' Hands-on features such as the Shure Wireless Workshop provided live audio professionals with opportunities to deepen their technical capabilities and engage in peer learning through practical demonstrations and real-time troubleshooting. SLS Expo is supported by the Kingdom's General Entertainment Authority and the Ministry of Investment of Saudi Arabia. The event continues to serve as a strategic business environment where government entities, technology providers, integrators, and venue operators align around a shared vision for growth. Co-located with the Saudi Entertainment and Amusement Expo, SLS offers a complete ecosystem for live event professionals seeking to connect, collaborate and contribute to the development of Saudi Arabia's AV and production sectors.
Leaders
7 hours ago
- Leaders
AI-Powered Baseer Platform: Cutting-Edge Technology for Efficient Hajj Crowd Management
The Baseer platform has emerged as a sophisticated, AI-driven system that diligently monitors every moment within the two holy mosques. More than a technological solution, it acts as a dynamic, living presence—supporting pilgrims in their religious rituals with peace and reverence while safeguarding their well-being. Additionally, it stands as a testament to a national vision rooted in foresight and respect for human dignity. SDAIA Developed by the Saudi Data and Artificial Intelligence Authority (SDAIA) in partnership with the Ministry of Interior, Baseer represents the Kingdom's broader mission to harness modern technology for the benefit of humanity. The platform also has been instrumental in swiftly locating missing individuals—adults and children alike—reuniting them with their families and significantly reducing search times. This has brought comfort and reassurance to countless pilgrims. Beyond its role in locating missing persons, Baseer plays a critical part in managing crowds within the holy sites. By easing congestion during peak periods and facilitating smooth movement through corridors and courtyards, it allows worshippers to perform their rituals in a calm, safe, and dignified setting—free from overcrowding or disruption. Powered by advanced AI and computer vision technologies, the platform equips authorities with real-time insights to anticipate incidents, allocate resources efficiently, and make informed decisions that prioritize safety and order. Baseer is more than a digital platform; it exemplifies the seamless integration of technology and human-centered service. It enhances the spiritual journey by providing a secure, respectful environment aligned with the sanctity of the place and the sacredness of the time. Finally, through Baseer, Saudi Arabia reaffirms its dedication to delivering a safe, efficient, and spiritually enriching Hajj experience. Related Topics: SFDA, SDAIA Sign MoU to Boost Data, AI Collaboration Saudi Interior Min.: Tourism Companies Deceive Pilgrims, Encourage Hajj Violations Riyadh Global Health Exhibition to Bring Together Int'nal Healthcare Experts Intensive Preparations for Smooth, Safe Hajj Season: Mecca Deputy Governor Short link : Post Views: 1
Arab News
13 hours ago
- Arab News
Saudi commercial bank profits jump 16% in April, topping $2bn before zakat, tax
RIYADH: Saudi Arabia's banking sector extended its winning streak in April, posting SR7.77 billion ($2.07 billion) in pre-zakat and tax profits, a 16 percent increase compared to the same month last year. According to the Saudi Central Bank, also known as SAMA, this brought year-to-date earnings to SR32.97 billion, an annual rise of 20 percent, keeping the Kingdom firmly on course for another record-breaking period. The sustained momentum is attributed to a robust mix of state spending on giga-projects, resilient consumer demand, and still-elevated interest rates. Financing volumes continue to climb, driven primarily by corporate borrowers across a growing range of industries, including manufacturing, utilities, insurance, and private education. Contractors are also racing to secure long-term credit for giga-projects such as NEOM, Diriyah, and the Jafurah gas field. A wider Gulf picture Strong as those local figures are, the broader region is also gaining momentum. A Kamco Invest report released in May showed that Gulf banks collectively earned a record $15.6 billion in the first quarter of 2025, an 8.6 percent increase from a year earlier. Financial institutions in the UAE posted the largest absolute increase, adding $639.6 million, while Saudi lenders recorded the fastest annual growth at 17.2 percent. Kamco added that fee income is rising, costs are under control, and loan-loss provisions fell sharply during the period, cushioning a small dip in net interest income. Investor appetite is visible in market valuations. Forbes Middle East's '30 Most Valuable Banks 2025' March list includes 10 Saudi lenders with a combined market cap of about $269 billion— roughly one-third of the entire ranking. Al Rajhi Bank led the pack at $105.6 billion, with Saudi National Bank following at $54.7 billion. Global Finance named Saudi Awwal Bank the Kingdom's best lender in its May 'World's Best Banks in the Middle East 2025' release, highlighting its HSBC-backed mobile app upgrades, Visa Direct payments, and one-stop small and medium-sized enterprises lending platform. Cleaning the books and raising cash Banks are also getting balance sheets ready for the next investment wave. Bloomberg reported in March that lenders are exploring sales of older non-performing loans to specialist investors to free up capital for upcoming mega project drawdowns. They're also tapping capital markets. By June, they had issued over $5.6 billion in Additional Tier-1 bonds, already a full-year record and the world's second-largest AT1 issuance in 2025, according to Bloomberg. The spree includes Al Rajhi Bank's $1.25 billion deal in April, Banque Saudi Fransi's $650 million perpetual at 6.375 percent in May, Saudi Awwal Bank's $650 million inaugural issue, and Alinma Bank's $500 million of sustainable sukuk, all heavily oversubscribed. By tapping eager investors now, while margins remain healthy and global demand for Gulf paper is strong, lenders are bulking up capital buffers and keeping loan-to-deposit ratios in check. That leaves them better prepared to fund the fast-rising credit needs of projects like NEOM and Diriyah without tripping liquidity alarms later in the year. Fintech role Fintech is reshaping Saudi banking from the ground up. The Saudi Central Bank's Open Banking Framework — most recently updated in September to cover payment-initiation services — sets common technical rules that let lenders and start-ups plug their systems together safely and at speed. Speaking at the inaugural 24 Fintech conference in September, Finance Minister Mohammed Al-Jadaan revealed that the Kingdom had licensed 224 fintech firms by the second quarter of 2024, up from fewer than 100 just three years earlier. One of the newest players is Riyadh-based Stitch, which closed a $10 million seed round on May 28. The company offers a single set of application-programming interfaces that lets banks, fintechs and even non-financial brands bolt on real-time payments and open-banking functions far faster than older systems. Early adopters already include Lulu Exchange and point-of-sale platform Foodics. The founders say the fresh cash will go toward doubling the engineering team and expanding the product suite. Looking ahead Riyad Capital's first-quarter preview, released in April, expects another double-digit profit rise this year, about SR19 billion for the listed banks it tracks, as loan growth stays strong and rate cuts arrive slowly. S&P Global, in its Saudi Arabia Banking Sector Outlook 2025 report, says a 10 percent increase in lending should outweigh a 20- to 30-basis-point dip in margins, keeping sector returns on assets near 2.1 percent to 2.2 percent. Funding is the main watchpoint. Moody's shifted its system outlook to stable on Feb. 25, saying strong credit growth is tightening liquidity, but capital buffers remain solid. For now, asset-quality risks remain low. S&P expects non-performing loans to edge up to just 1.7 percent by the end of 2025, while loan-loss provisions are projected to stay around 50 to 60 basis points. Banks' total capital ratios, hovering near 19 percent, provide a solid buffer to absorb potential shocks from falling oil prices or rising private-sector leverage. Saudi lenders are still the region's earnings workhorse. Profits are rising, market values are high, and fresh money — from bond buyers to venture capitalists — is flowing in. If they can keep gathering deposits quickly enough to fund a fast-growing loan book, the Kingdom's banks look set to stay ahead of their Gulf neighbors in both profit and ambition well into next year.
