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Thu 4 Jul 2013 09:32 AM

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Saudi Arabia approves $1.3bn housing loans

More than 10,000 people will receive the loans to help fund 12,018 properties across kingdom

Saudi Arabia approves $1.3bn housing loans
Cranes stand beside new high rise buildings under construction in the King Abdullah financial district of Riyadh, Saudi Arabia, on Monday, April 9, 2012. Saudi Arabias gross domestic product expanded 6.64 percent in the fourth quarter from a year ago, the kingdoms statistics agency said. (Bloomberg)

Saudi Arabia has approved SR5bn ($1.3bn) worth of housing loans to citizens.

More than 10,000 people will receive the loans to help fund 12,018 properties to be built across the kingdom, a statement on Saudi Press Agency said.

It is the third round of housing loans issued this year as the kingdom attempts to draw down its housing crisis amid a rapid rise in the country’s population, which has surpassed 28m.

In April, King Abdullah granted plots of land and housing loans to a large number of Saudis who did not already own a home.

It followed the allocation of SR250bn to build 500,000 housing units.

The loans are also expected to give a short-term boost to construction and jobs.

A year ago, the Shoura Council also approved a new mortgage law in a bid to make it easier and more attractive for individuals to borrow to fund a home.

The details were not made public but are believed to be a change to the former legislation that required housing loans to be taken out against salaries rather than the property.

Mortgage lending accounted for only 6 percent of the kingdom’s overall loans at the time but was expected to significantly increase following the new law.

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