Apr. EN 2019

The report indicated that the ongoing pressures have not discouraged banks from expanding their exposure to the real estate sector over the past few years until now. They have maintained their elastic policies of providing all types of finance, both retail and corporate, with data recording considerable jumps of up to 16% in real estate portfolios in Saudi Arabia to SAR154.7 billion by the end of 2018 and SAR226.2 billion by the end of 2017. Property projects account for 20% of credit facilities provided until the end of Q32019-, amounting to a total of SAR305 billion, with mortgages hitting SAR99 billion in a fresh indication of the growing appeal of the realty market and the leading role played by banks in this regard. 4 Mazaya Monthly Real Estate Report - Week 1 - April 2019 In conclusion, the report doubled on the positive sentiments currently prevailing on the real estate sector, saying that the decline in net profit margins will get property developers to delay some of their projects in a way that would affect the supply of new units and catalyze purchasing trends, driven by price hike predictions. In addition, the strong demand coming from the East for residential units will drive increased demand, with property markets expected to secure more balance amidst an anticipated 6% annual growth in home supply, a percentage that matches the projected population growth rates in a way that will subsequently consolidate asset value and liquidity levels. Highlighting the prevailing positive real estate sentiments, the report cited a 43% rise in home financing in Saudi Arabia to SAR27 billion by the end of 2018 as compared to 2017, with the figure projected to further increase during 2019.