Mortgage law to boost Saudi housing market

The housing market in Saudi Arabia is set to boom with the introduction of a long-awaited mortgage law later this year, Arab News reports.

The newspaper reports on a review by the Jeddah-based National Commercial Bank (NCB), which says the Saudi housing market is currently nonexistent due to the lack of a coherent mortgage system.

A number of banks in the Kingdom have begun offering Shariah-compliant home financing credit in anticipation of the law, which is set for approval by the end of 2007 or early 2008.

NCB estimates outstanding housing credit is likely to rise from SR4.0 billion in 2007 to SR46 billion by 2010.

Economist Mazen A. Tammar said “the significant pent-up demand for housing represents huge potential for mortgage financing in the Kingdom, creating a new market segment for Saudi banks.”

According to NCB, almost 44% of housing in the Kingdom is currently occupied on a rental basis.

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