- New loans down by more than 50%
- Combines lending and supply
- Aims to help first-time buyers
Saudi Arabia has launched a programme to help first-time buyers get mortgages, after new home loans fell by more than half over the past year, jeopardising the kingdom’s 2030 homeownership target.
The scheme was launched by the Real Estate Development Fund (REDF) in partnership with Saudi National Bank (SNB) and the National Housing Company (NHC). The bank will provide mortgages backed by the development fund, while the NHC supplies homes in Riyadh, Jeddah and Dammam. Monthly instalments start from SAR699 ($186).
REDF chief executive Loaye Al Nahidh said combining financing, supply and government support would make ownership more accessible for Saudi families.
Saudi Central Bank data shows the value of new residential mortgages fell to SAR4.4 billion in May 2026, down from SAR9.96 billion a year earlier. That is a drop of about 56 percent and continues a slide in recent months.
In November 2025 the steepest year-on-year decline in nearly nine years was recorded, with new mortgages and deal volumes down by around half. Analysts have pointed to a mix of affordability pressure and buyer caution.
Faisal Durrani, head of research at Knight Frank Mena, previously told AGBI that “income levels have not risen at the same pace”, which has driven down sales volumes and transaction values.
Wider credit growth has also cooled. Outstanding bank credit rose just 2.2 percent between January and May, compared with 5.4 percent growth in the same period a year earlier, as the Public Investment Fund tightened spending and cancelled contracts.
Monica Malik, chief economist at Abu Dhabi Commercial Bank, said the “recalibration of the investment programme” was a central factor behind slower lending, although construction activity has stayed buoyant.
The new REDF programme is designed to address that squeeze directly. By sharing risk with banks, it hopes to widen lending capacity without depending on tighter public spending and to steer more first-time buyers back toward formal mortgages.
Building permits rose 28 percent in April, as citizens increasingly buy plots and self-build rather than purchase from developers.
Durrani called the trend culturally significant and said land prices had fallen sharply in some areas of Riyadh as the “White Land” tax on undeveloped land pushes owners to sell. He also warned of an oversupply of high-end homes, since developers “had to go down the route of luxury housing” to make land economics work, leaving a gap between what buyers want and what is being built.
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Authorities have tried other levers, too. Fractional ownership platforms and plans to tokenise millions of property “parcels” aim to give developers liquidity without relying on costly bank financing.
Foreign ownership rules, published last month after a long delay, have brought clarity but not yet a surge in buyers, according to analysts. Susan Amawi of real estate consultancy Knight Frank said demand was likely to build gradually as the framework beds in.
Saudi Arabia’s Vision 2030 still targets 70 percent homeownership, but falling mortgage volumes, a self-build boom and slow foreign uptake all suggest the traditional financing path is not delivering fast enough.