Saudi mortgage market to grow to $134 bln by 2020, says minister

Saudi Arabia’s housing ministry is aiming to increase its mortgage market size to SAR 502 billion ($134 billion) by 2020 from the current SAR 290 billion, Reuters reported on Wednesday, citing the Kingdom’s housing minister Majed Al Hogail.

“We are working to facilitate access to finance so that Saudi citizens’ chances to obtain fivefold what [it] was in the past,” he said.

The minister stated the government also aims to raise household ownership ratio to 70 percent by 2030, which would mean an additional 1.2 million housing units.

Earlier this year, the Saudi Arabian Monetary Authority (SAMA), the Kingdom’s central bank, allowed lenders to increase the maximum loan-to-value rate on for mortgages for first-time homebuyers to 90 percent from 85 percent.

The size of real estate financing relative to its gross domestic product is 5 percent in Saudi Arabia, compared to 69 percent in the US, 74 percent in the United Kingdom, and 43 percent in Canada, according to the housing ministry.