Saudi Arabia’s Public Investment Fund-backed mortgage company, the Saudi Real Estate Refinance Company (SRC), plans to roll out new funding soon to the Kingdom’s lenders to boost home ownership in Saudi Arabia, according to a report.
Announced in October 2017, the creation of the SRC and the overall plan for $32 billion to boost home ownership will enable Saudi home buyers to tap long-term, fixed-rate mortgages for the first time.
Majed al-Hugail, Saudi Arabia’s Minster of Housing.
The creation of the new SRC “in effect means buyers will no longer be held hostage to US interest rate movements,” which is typically the case for countries with pegged currencies.
The SRC also plans to launch its first debt issuance next month, CEO Fabrice Susini told Arab News.
Saudi Arabia wants to boost its primary home loans market from SR290 billion to SR500 billion ($77 billion -$133 billion ) by the end of the decade and to as much as SR800 billion ($213 billion) in 10 years, according to Arab News.
SRC estimates there are just 160,000 mortgages outstanding in a population of more than 31 million.
Susini said that there were also moves underway to encourage banks to extend mortgage lending beyond civil servants and the employees of select companies, Arab News reports.
The Kingdom’s Vision 2030 economic and social roadmap notes the importance of increasing home ownership in Saudi Arabia as a key measurement of successful national transformation. “Even though 47 percent of Saudi families already own their homes, we aim to increase this rate by five percentage points by 2020,” the document says. “This would be a substantial achievement given the high increase in the number of new entrants to the housing market. We will meet this target by introducing a number of laws and regulations; encouraging the private sector to build houses; and providing funding, mortgage solutions and ownership schemes that meet the needs of our citizens.”
