Residential real estate finance for individuals drops 21% to SAR 120.3 bln in 2022: SAMA

12/02/2023 Argaam Special
Saudi Arabian banknotes

Saudi Arabian banknotes


Residential real estate finance provided for individuals by banks in Saudi Arabia fell by 21% year-on-year (YoY) to SAR 120.3 billion in 2022, data issued by the Saudi Central Bank (SAMA) showed.

 

This is the first annual decline in new residential real estate financing provided to individuals by banks since the publication of the data.

 

The following is the volume of financing provided since 2016:

 

New Retail Residential Real Estate Finance (SAR bln)*

Period

Value

Change

2016

14.93

--

2017

18.92

27%

2018

27.74

47%

2019

78.96

185%

2020

150.79

91%

2021

152.54

1%

2022

120.27

(21%)

*Doesn’t include interest.

 

On a monthly basis, new residential real estate finance provided to individuals by banks recorded a YoY decrease during all months of 2022 except for June, which saw an increase of 58%.

 

Data indicated that the steepest decline in the volume of financing was in December by 50% to reach SAR 6.36 billion, as shown in the following table:

 

New Retail Residential Real Estate Finance (SAR mln)*

Month

2021

2022

Change

January

16,829

12,151

(28%)

February

14,181

8,784

(38%)

March

18,040

15,276

(15%)

April

15,595

9,219

(41%)

May

8,906

8,810

(1%)

June

8,322

13,122

+58%

July

9,381

7,189

(23%)

August

12,736

12,697

(0.3%)

September

12,036

9,930

(18%)

October

12,139

9,352

(23%)

November

11,773

7,386

(37%)

December

12,602

6,359

(50%)

*Doesn’t include interest.

 

 

Villa mortgages accounted for 70%, or SAR 83.97 billion, of total housing loans provided in 2022. Apartments and land plots followed with SAR 27.24 billion and SAR 9.07 billion, respectively. 

 

New Real Estate Finance by Product Type (SAR mln)*

Period

Villas

Apartments

Land

January 2022

9,403

2,106

642

February

6,818

1,498

468

March

9,224

2,956

3096

April

5,902

1,707

1610

May

6,785

1,605

420

June

9,415

3,167

540

July

5,392

1,514

283

August

8,607

3,618

472

September

6,708

2,825

396

October

6,190

2,717

445

November

5,127

1,879

380

December

4,397

1,648

313

Total

83,968

27,240

9,065

*Doesn’t include interest.

 

According to SAMA, 154,400 contracts were signed between banks and retail clients in 2022, a decline of 23% YoY.

 

Number of New Real Estate Finance Contracts by Banks*

Month

2021

2022

Change

January

23,298

16,442

(29%)

February

18,989

11,615

(39%)

March

23,380

18,999

(19%)

April

19,889

11,255

(43%)

May

11,495

10,943

(5%)

June

11,309

16,487

+46%

July

12,809

9,047

(29%)

August

17,143

16,255

(5%)

September

15,453

12,902

(17%)

October

16,223

12,397

(24%)

November

15,406

9,785

(36%)

December

16,087

8,265

(49%)

Total

201,481

154,392

(23%)

*Doesn’t include interest.

 

Financing firms provided new real estate loans worth SAR 3.1 billion in 2022, a decline of 18% YoY.

 

New Real Residential Estate Finance Contracts by Financing Firms (SAR bln)*

Period

Value

Change

2016

2,166

--

2017

2,102

(3 %)

2018

2,461

17 %

2019

5,287

115 %

2020

4,592

(13 %)

2021

3,767

(18 %)

2022

3,086

(18 %)

*Doesn’t include interest.

 

Monthly, new residential real estate finance provided to individuals by financing firms recorded a YoY decrease in nine months, led by February and May, by 42% each. However, funding increased in three months, topped by June, at 82%, as shown in the table below:

 

New Real Residential Estate Finance Contracts by Financing Firms (SAR mln)

Month

2021

2022

Change

January

391

264

(32%)

February

382

221

(42%)

March

515

304

(41%)

April

343

211

(38%)

May

254

148

(42%)

June

193

351

+82%

July

191

167

(13%)

August

337

284

(16%)

September

350

305

(13%)

October

287

280

(2%)

November

264

271

+3%

December

260

280

+8%

*Doesn’t include interest.

 

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