Saudi Arabian housing market continues recovery, residential mortgages hit five-year high

Across the kingdom, 25,700 mortgage contracts were issued in April, and 38,285 mortgages were granted for purchasing villas and townhouses in the first quarter of 2021, with SAR48 billion ($12.8bn) worth of residential mortgages for homes and land issued – both five-year highs.

“The vast apparatus that is Vision 2030 is percolating through to the kingdom’s residential market, with rising residential mortgage rates, helping the government to realise its ambitions of higher home ownership rates,” said Faisal Durrani, head of Middle East research at Knight Frank.

“Indeed at 60 percent at present, the government has already surpassed its 2020 target by eight percent and is well on course to achieving 70 percent home ownership by 2030.”

Knight Frank noted that a number of key policy initiatives are underpinning the resilience of residential sales activity, which has seen sales volumes return to pre-Covid levels.

“Initiatives such as Sakani, which was first launched in 2017 to boost home ownership through a landmark housing allocation programme, plus the Wafi programme that allows off-plan sales, are transforming Saudi Arabia’s residential landscape. This coupled with the kingdom’s tremendous home building programme, which aims to add over 500,000 units to Riyadh’s housing stock by 2030 alone – that’s just 100,000 units less than Dubai’s total current housing stock – means Saudi nationals are able to access the housing ladder in record numbers.

Faisal Durrani, head of Middle East research at Knight Frank

“Indeed, at 115,000 transactions, sales volumes between January and May are on par with the same period in 2019 and are in fact 49 percent higher than January to May 2018. Home buyers and lenders are clearly feeling more confident about life as the post-Covid recovery starts to bed in,” Durrani said.

Knight Frank said that 1.1 million families have benefitted from the Sakani program since its launch five years ago.