(MENAFN) In January 2024, banks in Saudi Arabia disbursed residential mortgage loans amounting to SR7.54 billion (USD2 billion), marking the highest level in eleven months as per data released by the country's central bank. This figure represents a significant increase of 21 percent, or SR1.3 billion, compared to the previous month's loan disbursements.

The surge in mortgage loans can be attributed to various government initiatives aimed at enhancing access to finance, introducing more affordable housing options, and improving operational efficiencies within the housing sector. The Saudi government has implemented several measures to bolster the infrastructure of the housing sector and enhance the governance of housing programs.

These residential loans are typically utilized for the purchase of houses, apartments, and land. The majority of the loans, accounting for 68 percent or SR5.13 billion, were allocated for house purchases, witnessing a 19 percent increase from the preceding month. Apartments accounted for 26 percent of the loans, totaling SR1.97 billion, with a growth rate of 17 percent during the same period.

Although constituting the smallest portion at 6 percent, new loans for land purchases exhibited the highest growth rate at 73 percent, amounting to SR440 million in January.

One of the key initiatives propelling the transformation of the Saudi housing sector is the establishment of the Saudi Real Estate Refinance Co. (SRC) in 2017, by the Public Investment Fund. SRC aims to bolster liquidity in the real estate market and improve homebuyers' access to sustainable financing solutions.

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