عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Saudi Mortgage Loans Reach Record Highs

The Cityscape International Real Estate Exhibition 2024 in Riyadh (Asharq Al-Awsat)
The Cityscape International Real Estate Exhibition 2024 in Riyadh (Asharq Al-Awsat)
TT
TT

Saudi Mortgage Loans Reach Record Highs

The Cityscape International Real Estate Exhibition 2024 in Riyadh (Asharq Al-Awsat)
The Cityscape International Real Estate Exhibition 2024 in Riyadh (Asharq Al-Awsat)

Mortgage lending provided by financing companies has reached an all-time high by the end of the third quarter of 2024 amid developments in Saudi Arabia’s real estate sector.

According to data from the Saudi Central Bank (SAMA), the companies issued approximately SAR 28 billion ($7.4 billion) in real estate loans.

The data indicates that corporate borrowers accounted for SAR 5 billion, while individuals received SAR 23 billion. Additionally, financing companies in the Kingdom reported their highest net income since 2022 during the third quarter, amounting to SAR 768 million ($204.5 million).

Mortgage loans from commercial banks also rose for both individuals and companies, recording a 13% year-on-year increase to SAR 846.48 billion ($225 billion) by the end of Q3, compared to SAR 747 billion ($199 billion) during the same period in 2023. Of this, individual loans comprised 77.6% of the total, amounting to SAR 657 billion—an 11% annual increase—while corporate loans represented 22.4%, growing by 22%.

Commenting on the market’s growth, Mohammed Al-Farraj, Senior Director of Asset Management at Arbah Capital, told Asharq Al-Awsat that “the Saudi real estate market is experiencing unprecedented momentum, driven by a significant increase in mortgage lending to individuals by financing companies. Last year witnessed record growth in this type of lending.”

Al-Farraj predicts the upward trend in the mortgage financing market will continue into 2025, with a projected 12% growth. He attributes this to reduced interest rates, rapid economic growth, rising purchasing power, increased consumer confidence, successful government housing policies, a broader variety of real estate products, and growing demand for housing. He also anticipates that this growth will stimulate economic activity and increase demand for various goods and services.

The US Federal Reserve has played a significant role in the global economic climate by cutting interest rates three consecutive times between September and December 2024, reducing them by approximately 100 basis points to a range of 4.25%-4.5%.

Saudi Arabia has placed considerable emphasis on the mortgage market to enhance liquidity in the real estate financing sector. Several agreements and memorandums of understanding (MoUs) have been signed to develop and strengthen this vital sector.

The Saudi Real Estate Refinance Company (SRC), wholly owned by the Public Investment Fund (PIF), recently signed an MoU with Hassana Investment Company to develop the market, attract local and international investors, and expand the secondary real estate market.

Additionally, SRC signed an agreement with US-based BlackRock to enhance mortgage financing programs in the Kingdom and increase institutional participation in capital markets. In November, it entered an MoU with King Street, a capital management firm, to activate initiatives aimed at creating a sustainable ecosystem for mortgage refinancing.

Most Viewed

 
 
Business

Australia to Force Gas Giants to Reserve Fuel for Domestic Use

An LNG tanker berthed at the Karratha gas plant loading terminal in Western Australia. Handout / WOODSIDE ENERGY LTD/AFP
An LNG tanker berthed at the Karratha gas plant loading terminal in Western Australia. Handout / WOODSIDE ENERGY LTD/AFP
TT
TT

Australia to Force Gas Giants to Reserve Fuel for Domestic Use

An LNG tanker berthed at the Karratha gas plant loading terminal in Western Australia. Handout / WOODSIDE ENERGY LTD/AFP
An LNG tanker berthed at the Karratha gas plant loading terminal in Western Australia. Handout / WOODSIDE ENERGY LTD/AFP

Australia will look to stave off energy shortages by forcing major gas companies to reserve 20 percent of their exports for domestic use, Energy Minister Chris Bowen said Thursday.

The country is one of the world's largest exporters of liquefied natural gas (LNG), a key fuel source in hot demand as war in the Middle East upends global energy markets.

In a bid to shield the nation from "global price volatility", Australia's largest gas firms will be forced to ring fence fuel for the domestic market -- equivalent to 20 percent of their exports.

"We've been acting to shield Australians from global energy shocks by investing in reliable, sovereign renewables and keeping more of the gas we need onshore," Bowen told reporters.

Australia is a major supplier of LNG throughout Asia, where prices have soared since the United States and Israel launched strikes on Iran at the end of February.

Around 40 percent of Japan's LNG comes from Australia, according to the Asia Natural Gas and Energy Association.

Australia is Singapore's largest source of LNG, supplying more than 30 percent of its needs, according to government figures.

Bowen sought to soothe any concerns that the decision could hurt trading partners.

- 'Reliable' partner -

"We will not disturb any existing contracts.

"We have consulted closely with trading partners to ensure that it's well understood around the world that Australia will always be a reliable supplier of energy."

The government would pass laws to have the reservation scheme in place from July 2027, Bowen said.

Geographically isolated and with only two oil refineries, Australia is heavily exposed to disruptions to global fuel supplies.

With Iran halting a fifth of world fuel shipments through its effective closure of the crucial Strait of Hormuz, Australia has moved to shore-up its fuel security.

Prime Minister Anthony Albanese announced Wednesday that Australia would establish a national fuel stockpile of one billion liters.

Australia's major gas companies -- including Shell, Chevron and Woodside -- reap huge profits selling LNG overseas.

Critics have been piling pressure on the government to drastically increase taxes on these exports -- an idea that Canberra shot down last week.

World oil prices dived on Wednesday after US President Donald Trump raised hopes of an end to the Iran war.

Business

French Utility Engie Not Changing Middle East Strategy Despite Disruptions

(FILES) This photograph shows the "Tour First" also known as "Tour CB31", headquarters to French multinational energy group Engie, in the La Defense business district in Courbevoie, western suburb of Paris, on March 25, 2025. (Photo by JOEL SAGET / AFP)
(FILES) This photograph shows the "Tour First" also known as "Tour CB31", headquarters to French multinational energy group Engie, in the La Defense business district in Courbevoie, western suburb of Paris, on March 25, 2025. (Photo by JOEL SAGET / AFP)
TT
TT

French Utility Engie Not Changing Middle East Strategy Despite Disruptions

(FILES) This photograph shows the "Tour First" also known as "Tour CB31", headquarters to French multinational energy group Engie, in the La Defense business district in Courbevoie, western suburb of Paris, on March 25, 2025. (Photo by JOEL SAGET / AFP)
(FILES) This photograph shows the "Tour First" also known as "Tour CB31", headquarters to French multinational energy group Engie, in the La Defense business district in Courbevoie, western suburb of Paris, on March 25, 2025. (Photo by JOEL SAGET / AFP)

French utility Engie is still looking to grow and develop its profile of energy assets in the Middle East despite the disruptions ⁠from the Iran War, Engie's ⁠finance chief Pierre-Francois Riolacci told reporters on Thursday.

"We don't see ⁠any questioning of our development plan in the Middle East at all. It's not necessarily the largest region, but it still is part ⁠of ⁠our plans, and we do not see the crisis prompting us to revise our strategy," Riolacci said.

Engie met expectations as it reported a drop in first-quarter earnings on Thursday after warmer weather lowered domestic gas sales and deliveries.

The company, which produces, transports and sells gas and electricity, said earnings before interest ⁠and tax (EBIT) excluding nuclear, ⁠were 3.4 billion euros ($4 billion), down 8.4% from a year earlier.

That matched the consensus forecast of 3.4 billion euros from analyst estimates compiled ⁠by LSEG.

Engie also confirmed a media report this week that said onshore wind project development had slowed in the United States, but it added that solar and battery sector development continues.

"Some permits are being revoked for onshore wind power. It's clear ⁠that ⁠obtaining the necessary authorizations is indeed difficult," Riolacci told reporters.

"Even when permitting isn't required on federal lands, we still face challenges getting approval from agencies."

Business

Maersk First-quarter Profit Beats Forecasts, Keeps Outlook Unchanged

A cargo ship carrying containers from the Danish company Maersk sails into the Pacific entrance of the Panama Canal in Panama City on April 21, 2026. (Photo by MARTIN BERNETTI / AFP)
A cargo ship carrying containers from the Danish company Maersk sails into the Pacific entrance of the Panama Canal in Panama City on April 21, 2026. (Photo by MARTIN BERNETTI / AFP)
TT
TT

Maersk First-quarter Profit Beats Forecasts, Keeps Outlook Unchanged

A cargo ship carrying containers from the Danish company Maersk sails into the Pacific entrance of the Panama Canal in Panama City on April 21, 2026. (Photo by MARTIN BERNETTI / AFP)
A cargo ship carrying containers from the Danish company Maersk sails into the Pacific entrance of the Panama Canal in Panama City on April 21, 2026. (Photo by MARTIN BERNETTI / AFP)

Shipping group Maersk posted first-quarter operating profits slightly above analyst forecasts on Thursday and kept its full-year earnings guidance unchanged.

Underlying earnings before interest, tax, depreciation, and amortization (EBITDA) for the January-March period came in at $1.73 billion, compared to a median forecast of $1.66 billion in a company-provided poll of 10 analysts.

Maersk, which is often seen as a bellwether for global trade, still projects global container volume growth of between 2% ⁠and 4% this ⁠year.

"We've seen strong demand across most regions this quarter, supporting robust volume growth in our three business segments," Reuters quoted Chief Executive Vincent Clerc as saying in a statement.

The first quarter does not capture the Middle East war's full impact on global supply ⁠chains as the conflict began on February 28 when the United States and Israel launched coordinated strikes on Iran.

The war has disrupted shipping routes across the region after Iran closed the Strait of Hormuz to commercial traffic, pushing up costs such as fuel.

The security situation remained fragile, with French shipping group CMA CGM saying on Wednesday that one of its container ships was hit while transiting the Strait of Hormuz, injuring ⁠crew ⁠and damaging the vessel.

The Middle East security situation also impacts shipping in the Red Sea, forcing Maersk to continue to reroute vessels around Africa, away from the Suez Canal and the Bab el-Mandeb Strait.

This marked an abrupt stop to Maersk's tentative efforts for a gradual return of some services to the Suez route, seen as a key step towards ending years of global trade disruption caused by attacks on ships in the Red Sea by Yemen's Houthis.