Saudi Arabia’s mortgage law, approved two days ago after more than a decade of debate, will encourage banks to expand lending in a $16 billion market that now accounts for less than 4 percent of all home purchases.
The market may increase to about $32 billion annually over the next 10 years, providing opportunities for lenders, property developers and middle-class Saudi homebuyers, according to Naveed Siddiqui, chief executive officer of Capitas Group International, a Saudi holding company focused on Islamic finance.
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Ibrahim Al-Assaf, minister of finance of Saudi Arabia. Photographer: Tim Boyle/Bloomberg
“The financial sector alone in Saudi Arabia will not be able to fill the gap,” he said. “The government will have to allow non-banking financial institutions such as mortgage companies to come in to stimulate the market.”
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