Riyadh September 11 2023: Minister of Municipal, Rural Affairs, and Housing, Majed Al-Hogail, said that the ministry is working to help Saudi families own homes as part of its strategic plan to offer more than nine different packages.
The ministry is also working to reduce the price of housing units to be less expensive than expected, Al-Hogail added in an interview with Al Arabiya TV at the Cityscape Global exhibition in Riyadh.
The target price for such housing units ranges between SAR 500,000 and SAR 1.2 million, as these prices are considered affordable to most beneficiaries of the housing sector.
The ministry provided packages with Saudi banks to ensure, through the Saudi Mortgage Guarantee Services Co. (Damanat), that the cost of risks is mitigated, according to Al-Hogail.
In addition to the state's incentive support for first-time home owners, the ministry is working with banks on developing a stimulus project by pumping some deposits to provide citizens with a cheaper cost of borrowing compared to the market's range between 150 and 200 basis points.
The minister also pointed to interest rates as an influential factor and a major challenge for the real estate sector, indicating that inflation in the Kingdom has not been affected as greatly as in many other countries. He noted that interest rates remain a key concern as they have reached higher levels.
The volume of mortgages in the Kingdom reached SAR 600 billion and are expected to continue rising, driven by the applied programs, Al-Hogail stated.