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Saudi Housing Finance Rose 15% in the First Half of 2025 Thanks to Government Incentives

Citizens view a model of one of the residential master plans at the Cityscape Global exhibition in Riyadh (SPA)
Citizens view a model of one of the residential master plans at the Cityscape Global exhibition in Riyadh (SPA)
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Saudi Housing Finance Rose 15% in the First Half of 2025 Thanks to Government Incentives

Citizens view a model of one of the residential master plans at the Cityscape Global exhibition in Riyadh (SPA)
Citizens view a model of one of the residential master plans at the Cityscape Global exhibition in Riyadh (SPA)

Housing finance for individuals in Saudi Arabia surged by 15% in the first half of 2025, reaching $12.8 billion (SAR48 billion), compared to $11.1 billion (SAR41.74 billion) in the same period last year, according to data from the Saudi Central Bank (SAMA).

Experts attribute the increase to a mix of government incentives, competitive financing offers, stable interest rates, and rising rents in major cities, which have boosted demand for home ownership.

Real estate consultant Matar Al-Shammari told Asharq Al-Awsat that the growth is largely driven by initiatives from the Ministry of Housing, the Real Estate Development Fund, and the “Sakani” program, along with stable mortgage rates and diverse housing products.

He noted that off-plan construction projects have seen particular interest, supported by competitive bank offers, fee exemptions, and a concentration of demand in cities like Riyadh, the Eastern Province, and the Western Region, which benefit from strong job markets, educational opportunities, and rapid economic growth. The entry of international developers into the Saudi market is also reinforcing its investment appeal.

For his part, property valuer and expert Eng. Ahmed Al-Faqih cited two main factors behind the surge. First, historically low mortgage rates, coupled with both new and pent-up demand, have logically boosted borrowing. Second, soaring rents in major urban centers have made buying more financially attractive than remaining a tenant.

Al-Faqih highlighted that government housing programs - particularly those by the National Housing Company - have focused on off-plan sales, offering preferential rates that make them more appealing than ready-built properties, thereby increasing the uptake of supported housing projects.

Real estate consultant Al-Oboudi bin Abdullah added that the rise in housing finance reflects sustained demand for residential projects in major cities, fueled by government incentives and attractive bank mortgage offers. He pointed to SAMA’s figures showing that over 97% of housing finance for individuals came from banks, with villas being the most financed property type (SAR29.6 billion), followed by apartments (SAR14.5 billion) and land plots (SAR2.65 billion).

These figures, he said, underline the continued strength and capacity of the Saudi housing market to absorb new projects, supported by strong buyer confidence. Looking ahead, he believes ongoing housing support programs, stable interest rates, and the imminent implementation of updated regulations allowing non-Saudis to own property will further stimulate the real estate sector in the second half of 2025.

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Business

Riyadh Air Launches First Domestic Service to Jeddah

The launch marks a key step in the carrier's strategy to expand its destination network from the Saudi capital. SPA
The launch marks a key step in the carrier's strategy to expand its destination network from the Saudi capital. SPA
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Riyadh Air Launches First Domestic Service to Jeddah

The launch marks a key step in the carrier's strategy to expand its destination network from the Saudi capital. SPA
The launch marks a key step in the carrier's strategy to expand its destination network from the Saudi capital. SPA

Riyadh Air, Saudi Arabia's new national carrier, launched on Sunday its first domestic flight from Riyadh to King Abdulaziz International Airport in Jeddah.

The move is part of Riyadh Air's plans to expand its domestic network through daily flights between Riyadh and Jeddah and strengthen connectivity between major destinations across the Kingdom.

The inaugural flight arrived from King Khalid International Airport in Riyadh with Minister of Hajj and Umrah Tawfig Al-Rabiah, President of the General Authority of Civil Aviation Abdulaziz Al-Duailej, Riyadh Air board member Raid Ismail, and several aviation-sector leaders on board.

They were received by Chairman of the Board of Directors of Jeddah Airports Company (JEDCO) Raed Al-Mudaiheem, JEDCO CEO Mazen Johar, and representatives of government and security agencies operating at the airport.

The launch marks a key step in the carrier's strategy to expand its destination network from the Saudi capital. The inaugural flight departed King Khalid International Airport (RUH) at 9:00 a.m. and landed at King Abdulaziz International Airport (JED) at 10:50 a.m.

Riyadh Air launched the route with two daily flights. Frequencies will increase to three daily flights from June 18 and four daily flights from July 2.

The route is being launched amid strong demand growth. According to aviation analytics firm OAG, the Riyadh-Jeddah route ranked as the world's fifth-busiest domestic air route in 2025, with 9.8 million seats.

By operating the service, Riyadh Air supports national strategies by providing additional seat capacity that contributes to the growth of the Kingdom's tourism, business, and economic sectors.

Riyadh Air CEO Tony Douglas said the launch of flights to Jeddah marks an important milestone in the airline's journey toward building a broad network connecting Saudi Arabia with the world. He noted that the route serves a large segment of business and leisure travelers and supports the goals of Saudi Vision 2030 to develop the aviation sector and strengthen air connectivity.

JEDCO CEO Mazen Johar said the new service reflects integration among the components of the Kingdom's aviation ecosystem and contributes to expanding travel options and enhancing passenger services. He added that King Abdulaziz International Airport served more than 14.8 million passengers through nearly 84,000 flights during the first quarter of 2026, reflecting continued growth in operational activity.

The new flights support Riyadh Air's goal of reaching more than 100 destinations worldwide. The route also facilitates business travel, tourism, and Hajj and Umrah traffic while reinforcing Riyadh's position as a major international air-connectivity hub.

Business

Saudi Housing Surpasses One Million Contracts as 70% Homeownership Target Nears

Construction work in the 'Shams Al-Diyar' project, part of the housing program in Riyadh (SPA)
Construction work in the 'Shams Al-Diyar' project, part of the housing program in Riyadh (SPA)
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Saudi Housing Surpasses One Million Contracts as 70% Homeownership Target Nears

Construction work in the 'Shams Al-Diyar' project, part of the housing program in Riyadh (SPA)
Construction work in the 'Shams Al-Diyar' project, part of the housing program in Riyadh (SPA)

Saudi Arabia continues to reshape its real estate sector at a rapid pace, achieving structural advances that have placed quality of life at the heart of urban development. The enabling of nearly 33,000 Saudi families to obtain their first home during the first quarter of 2026 underscores the efficiency of the regulatory framework in advancing the goals of Vision 2030 and moving toward its target of raising homeownership to 70 percent.

This momentum, which lifted the homeownership rate to 66.24 percent by the end of 2025, coincides with the Real Estate Development Fund and the Sakani program surpassing the milestone of one million subsidized contracts, reflecting a profound transformation in the structure of the market and greater integration across its financing and regulatory components.

Integrated Regulatory Environment

In an analysis of first-quarter 2026 figures, Mohammed Al-Rassasmah, spokesperson for the Ministry of Municipalities and Housing, told Asharq Al-Awsat that enabling 32,983 Saudi families to own their first home in just three months reflects the integration of the housing ecosystem across its various components, from developing the regulatory and legislative environment to expanding housing options and providing financing solutions and partnerships with the private sector.

Al-Rassasmah explained that the carefully planned expansion of housing projects and the diversification of real estate products have helped meet the needs of different segments of Saudi families. He pointed to the decisive role played by digital transformation in improving procedural efficiency and accelerating access to suitable housing solutions for beneficiaries.

He noted that this achievement builds on what Minister of Municipalities and Housing Majed Al-Hogail announced at the beginning of this year regarding the homeownership rate among Saudi families exceeding 66.24 percent by the end of 2025, demonstrating the success of the housing system in expanding ownership opportunities across the Kingdom.

Partnership With the Private Sector

Within this development path, Al-Rassasmah said partnerships with the private sector represent one of the key enablers of growth in the housing sector, contributing directly to increased real estate supply and faster development.

He added that real estate developers now offer a diverse range of housing products that meet families' aspirations, while the ministry continues to improve the investment environment and promote competitiveness.

He noted that the sector's transformation is no longer limited to developing individual housing units but now extends to creating integrated urban communities that provide services, facilities, infrastructure, and quality-of-life opportunities. This, he said, enhances the attractiveness of cities and improves the efficiency of long-term economic development.

Headquarters of the Real Estate Development Fund in Riyadh (Fund's website)

Off-Plan Sales Projects

Regarding off-plan sales projects, Al-Rassasmah said they have become one of the most important tools supporting increased housing supply and accelerating real estate development in recent years.

He explained that these projects have enabled the implementation of larger and more diverse developments, providing broader opportunities for ownership.

He stressed that the strict regulatory and oversight framework imposed by the ministry has enhanced the credibility of such projects and protected buyers' rights, increasing confidence in the market and significantly boosting demand. As a result, they have become one of the most reliable pathways supporting first-home ownership.

Long-Term Strategic Vision

The ministry's spokesperson also stressed that the ministry approaches housing demand from a long-term strategic perspective focused on increasing supply and improving the efficiency of the real estate market through empowering developers, developing land and master plans, stimulating investment flows, and expanding housing projects in areas experiencing high demand.

He explained that increasing supply and diversifying housing options contribute positively to market balance and help provide more suitable solutions for beneficiaries, alongside the ministry's ongoing efforts to enhance transparency, develop real estate indicators, and improve market efficiency to ensure it remains attractive and stable.

Al-Rassasmah concluded by describing mortgage finance as one of the key pillars behind the rise in homeownership rates in recent years through the provision of diverse and accessible financing solutions that have strengthened the purchasing power of Saudi families.

He noted that 23,222 families benefited from housing support services during the first quarter of this year alone, and added that cooperation among the housing ecosystem, financing institutions, and the Real Estate Development Fund helped push the number of subsidized contracts beyond 1.02 million by the end of last March.

According to Al-Rassasmah, the transformation currently taking place in the sector reflects a comprehensive structural shift that supports the sustainability of the real estate market and enhances citizens' quality of life in line with national ambitions.

Business

Iraq Cancels $764 million Baghdad Airport Project over Corruption Concerns

Ali al-Zaidi has decided to cancel the Baghdad International Airport development project - File photo/Reuters
Ali al-Zaidi has decided to cancel the Baghdad International Airport development project - File photo/Reuters
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Iraq Cancels $764 million Baghdad Airport Project over Corruption Concerns

Ali al-Zaidi has decided to cancel the Baghdad International Airport development project - File photo/Reuters
Ali al-Zaidi has decided to cancel the Baghdad International Airport development project - File photo/Reuters

Iraqi Prime Minister Ali al-Zaidi has decided to cancel the Baghdad International Airport development project after corruption suspicions were raised, Iraqi state media reported on Sunday, citing a government source.

The project involves a $764 million contract awarded last year to a consortium of Luxembourg-based Corporacion America Airports (CAAP) and Iraqi real estate firm Amwaj International, aimed at upgrading and expanding the capital’s main airport, Reuters reported.

Two government sources speaking on condition of anonymity due to the sensitivity of the matter told Reuters that officials raised concerns about potential irregularities over the tendering process and contract terms.

The move follows a drive against corruption which has meant growing scrutiny within government institutions.

The airport upgrade had been presented as a key infrastructure project to modernize Iraq’s aviation sector and increase capacity at Baghdad International Airport, which has suffered from years of underinvestment.