RIYADH (Reuters) - Saudi Arabia’s housing ministry has set a target for the mortgage market to reach a total value of 502 billion riyals ($134 billion) by 2020 from a current 290 billion riyals, the kingdom’s housing minister said on Wednesday.
Saudi Arabia has launched a program of measures to stimulate mortgage lending. So far these include allowing banks to provide a bigger share of funding for home purchases and lifting the maximum loan-to-value rate on for mortgages for first-time homebuyers to 90 percent from 85 percent.
“We are working to facilitate access to finance so that Saudi citizens’ chances to obtain fivefold what [it] was in the past,” Majed al-Hogail said at a housing conference.
The Saudi government wants to increase activity in the real estate market as it moves to revitalize the economy and is taking steps to reform the sector as part of its 2030 strategic plan.
He said the government aims to raise household ownership ratio to 70 percent by 2030, which would mean additional 1.2 million housing units.
The size of real estate financing relative to its gross domestic product is 5 percent in Saudi Arabia compared to 69 percent in the United States, 74 percent in the United Kingdom and 43 pct in Canada, the housing ministry says.
Reporting by Marwa Rashad; Writing by Saeed Azhar; Editing by Raissa Kasolowsky