Saudi Arabia’s Mortgage Law to May Double Market Size, NCB Says

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Saudi Arabian property market may double in size by 2015 if a planned mortgage law is put into effect, NCB Capital said.

“A timely implementation of the mortgage law would further support a sustained take-off in the real estate space,” chief economist Jarmo Kotilaine said in an e-mailed report today. “We expect gradual price appreciation of some 20 percent over the next three years.”

Banks have largely avoided mortgage lending in Saudi Arabia, because it lacks a legal framework for property foreclosures. The kingdom has a shortage of housing, mainly because of indigenous population growth, Banque Saudi Fransi said in a Jan. 13 report. The law will be introduced in the next few months, Central Bank Governor Muhammad al-Jasser said in January.