Saudi Arabia is experiencing a housing and mortgage boom, reflecting a government drive to boost home ownership as part of efforts to shake up the oil kingdom’s economy and its ultraconservative society. The world’s largest oil exporter, Saudi Arabia for decades had relatively low home ownership rates — just 47 per cent in 2016, compared with more than 60 per cent across the UK and US. Most people rented or lived with their families. Government housing grants were available, though would-be buyers used to wait for a decade, sometimes two to get them.
Under Islamic law, the payment or receipt of interest is frowned upon and regulation allowing mortgages was not passed until 2012. Since the government unveiled a target of 70 per cent home ownership in 2016 — as part of broader plans to transform the country economically and socially by 2030 — it has risen to more than 60 per cent, almost on a par with the US and the UK. Mortgages have ballooned from nothing a decade ago into a $124bn industry with about 870,000 contracts signed. New towns are quickly taking shape north of the capital Riyadh. In one project dubbed Murcia, the state-run National Housing Company has built rows of new villas, painted grey and yellow and priced between SR560,000 and SR1mn. When it is complete, it will be a sprawling suburb bisected by a canal, with gardens and a shopping boulevard. To boost the mortgage market, the government turned to its sovereign Public Investment Fund, which is chaired by Prince Mohammed and oversees many of the 2030 projects. The SRC, which provides liquidity to the banks through the sale of mortgage-backed securities, is a PIF company, as is Roshn, one of the main housebuilders. For now, Saudis who had given up hope of ever buying a home are happy to have a property they can call their own.