New mortgage law ‘to spur saudi real estate’

The proposed revision of mortgage lending in Saudi Arabia is expected to spark renewed interest in the residential sector, according to an expert.

“If the proposed revisions to mortgage lending take hold, the impact on the residential market could be significant – encouraging home ownership and boosting residential development in Saudi Arabia,” said Nick MacLean, managing director of CB Richard Ellis (CBRE) Middle East, a leading global real estate adviser.

“Considerable growth in the country’s population over the past few decades has caused mounting pressure on the supply of housing stock in the market, so any Change that will increase the amount of capital flowing into the residential sector should support an increase in development activity.”

“Strict adherence to Sharia law has historically limited home ownership to equity buyers. The proposed reforms would introduce Sharia-compliant mortgages that would open up the housing market to a much wider proportion of the population and increase bank capital flowing into the residential sector,” MacLean continued.

Source: Trade Arabia