International mortgage firms set to transform Saudi Arabia’s real estate sector: top official

RIYADH: Top international financial institutions Apollo and BlackRock are set to enter Saudi Arabia’s mortgage market, potentially transforming the Kingdom’s real estate market, a top official said. 

During a panel discussion at the Real Estate Future Forum in Riyadh, the adviser to Saudi Arabia’s minister of municipalities and housing, Hossam Redwan said that lower interest rates could also propel the mortgage sector in the Kingdom. 

Redwan’s comments align with Saudi Arabia’s Vision 2030 goal to strengthen the real estate sector as part of its efforts to diversify the economy and position the Kingdom as a global tourism and business destination.

Saudi Arabia’s Real Estate General Authority expects the Kingdom’s property market to reach $101.62 billion by 2029, with an anticipated compound annual growth rate of 8 percent from 2024. 

“Foreign entities are now ready to deploy capital by buying mortgages directly from banks and financing institutions. In a way, they would be performing a role similar to what the Saudi Real Estate Refinance Co. has been doing for the last few years,” said Redwan. 

He added: “However, SRC cannot fulfill its role on its own. So, hopefully, by the first quarter of 2025, you will hear of institutions like Apollo and BlackRock entering the mortgage market in Saudi Arabia directly. I am very excited about it.”

He also underscored the exponential growth of the Saudi mortgage market and said that its value has now reached SR750 billion ($199.96 billion). 

Redwan added that the recent approval of CMA, which allows foreigners to invest in Saudi-listed companies owning real estate in Makkah and Madinah, will increase international investment in the Kingdom. 

The new amendment by CMA, effective from Jan. 27, aims to boost the capital market’s competitiveness and align with the Vision 2030 economic diversification objectives, the authority said in a statement.