The Middle East is waiting with bated breath for the adoption of Saudi Arabia's mortgage law. Mortgage providers stress that the Saudi law would be a precedent and a potential model for the other Gulf Cooperation Council (GCC) countries to follow.
The GCC mortgage market is potentially tens of billions of dollars in size, and according to several mortgage providers more customers in the GCC are opting for Islamic mortgages. For instance, Sakana Holistic Housing Solutions, the Bahrain-based dedicated Islamic mortgage provider, which was established some four years ago, reports that 40 percent of its customers are non-Muslims. One of the most experienced mortgage bankers in the GCC is Raman Lakhsmanan. He pioneered mortgages in the region, first in Oman where he was involved in the first mortgage bank, Alliance Housing Bank, there in 1998 and then as a senior manager at Amlak Finance, the Islamic mortgage finance entity of Emaar Properties, in Dubai in 2003.
Since then has been at the helm of Sakana driving its business through both the boom years of yesteryear and the tough market of today in the aftermath of the global financial crisis. Here Raman Lakhsmanan, CEO, Sakana Holistic Housing Solutions, discusses the current state of the mortgage market in Bahrain and the GCC; the potential impact of the pending Saudi mortgage law on the regional market; the regulatory and legal issues that still need to be resolved; and the challenges and prospects for the mortgage market going forward.
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