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.
