Saudi property loans hit SR148.9bn in 2014

04/02/2015 06:30 AST

The volume of real estate loans provided by the Saudi banks to individuals and corporate amounted to SR 148.9 billion by the end of 2014, according to a financial report.

Property loans in 2014 were 31 percent higher compared to figures of 2013, which stood at SR113.7 billion, a report in Al-Eqtisadiah daily said.

The real estate loans provided to individuals captured the highest portion of the loans at 63 percent whereas the remaining portion, or 37 percent, went to corporate, the report said. The individual property loans grew by 34 percent to SR94.2 billion by the end of 2014 compared to SR70.3 billion in 2013 whereas corporate loans rose by 26 percent to SR54.7 billion compared to SR43.4 billion, the report said.

On quarterly-to-quarterly basis, property loans grew by six percent in Q4, 2014, compared to figures of Q3 of the same year which stood at SR140.4 billion. Similarly, individual property loans grew by seven percent to add another SR5.8 billion to loans of Q3, which reached SR88.4 billion. For corporate loans, they grew by five percent to hit SR54.7 billion in Q4 compared to SR51.9 billion in Q3, the report said.

Beginning from Nov. 9, 2014, the Saudi banks began to apply the new mortgage (property) system, which stipulates that a loan applicant should pay 30 percent of the required loan as the first installment, the report said.

The new property system, passed by the Saudi Arabian Monetary Agency (SAMA), allows loan applicants to get the remaining portion of the loan from financing firms or banks, which have already obtained licenses from SAMA, the report said.

Arab News