(MENAFN) In March, Saudi banks' loans totaled SR2.67 trillion (USD711.5 billion), marking an 11 percent increase compared to the same period in 2023, according to the latest data from the Saudi Central Bank, also known as SAMA.
Of this growth, personal borrowings constituted 35 percent, while the corporate sector received the remaining 65 percent. Notably, funds allocated to the corporate sector were predominantly directed towards real estate activities, as well as electricity, gas, and water supplies.
Specifically, real estate financing for corporate endeavors witnessed a significant surge of 27 percent in March 2024, representing the highest annual growth rate in 10 months, reaching SR275.2 billion.
A study conducted by Mortor Intelligence, using 2023 as a base year, estimated the value of Saudi Arabia's real estate market to be USD69.51 billion in 2024. The study further projects this market to grow to USD101.62 billion by 2029, at a compounded annual growth rate of 8 percent between 2024 and 2029.
The increasing momentum in real estate and construction activities likely contributed to heightened demand for debt-based financing, primarily sourced from the local banking sector. Saudi banks serve as key facilitators in providing loans for various real estate projects across the Kingdom.
Further emphasizing the trend, SAMA data indicates a notable uptick in new retail residential mortgage loans, reaching a 14-month high of SR7.63 billion in March. This figure represents a 5 percent increase compared to the corresponding period last year and a 10 percent rise from the preceding month.
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