Saudi Arabia's Public Investment Fund (PIF) on Thursday announced the establishment of the Saudi Real Estate Refinance Company (SRC), which aims to stimulate housing sector development by injecting liquidity in the property market.
In line with Vision 2030 objectives to improve the performance of the real estate market, the new company plans to raise the rate of home ownership among Saudis to 52 percent by the end of 2020.
Demand for real estate financing in the kingdom is expected to increase from SR280 billion in 2017 to SR500 billion in 2026, PIF said in a statement.
Launched in partnership with the Ministry of Housing, and under the chairmanship of Majed al-Hogail, the Minister of Housing, SRC is expected to refinance up to SR75 billion for the kingdom’s housing sector over the next five years, reaching SR170 billion by 2026.
The company will act as an intermediary access point for investors, aligning the liquidity, capital, and risk management requirements of real estate mortgage companies, with the risk acceptability and return on equity to meet investor targets, PIF said.
It aims to create stability and growth in the kingdom’s housing sector by injecting liquidity into the secondary mortgage market, improving standards, and facilitating access to local and international financing sources.
SRC will adopt a strategy of acquiring mortgage funds to increase financial capabilities and broaden the activities of real estate financing companies.
It will also work on linking the investment capital of foreign and local investors with the range of opportunities available in the Kingdom’s growing housing market.
In addition, the company’s activities will include issuing bonds as securities, supported through real estate mortgage contracts over the short and long term, to real estate financing companies.
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