Saudi Arabia’s banks may double real- estate financing this year as the biggest Gulf Arab economy overhauls mortgage rules and demand for housing increases, National Commercial Bank said.
Financing may climb to 60 billion riyals ($16 billion) from 29.3 billion riyals in 2011, economists Said Al Shaikh and Albara’a Alwazir said in a research report. Total housing stock may expand by 2.4 million units in the next 10 years, with annual demand rising to 264,000 units by 2020 from 195,000 in 2011, they said. National Commercial Bank, which is owned by the government, is the biggest lender in the kingdom.
“This significant growth in real-estate bank lending highlights a historical shift away from the conservative lending that has been practiced in previous years,” they wrote. “The mortgage market, upon the implementation of the mortgage law, has the potential to attract non-bank lenders.”
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