Saudi Arabia’s Public Investment Fund-backed Saudi Real Estate Refinance Company (SRC) has signed a joint agreement with Saudi National Bank for a refinancing deal worth $266.6 mn (SAR 1bn) to boost the home finance market in the kingdom.
According to a statement from the SRC, this is considered the largest bank refinancing deal in the kingdom’s banking sector. The agreement aims to refinance the real estate portfolio to provide long-term liquidity to the kingdom’s home finance market.
The agreement was signed in the presence of HE Majid bin Abdullah Al Hogail, Minister of Municipal and Rural Affairs and Housing and Ammar Alkhudairy, chairman of SNB.
Fabrice Susini, CEO of SRC, stated that the company continues to expand its partnerships with originators to boost the rate of Saudi homeownership to 70% by 2030.
He added that the refinance-deal is in line with the Vision 2030 housing program’s objectives by supporting the home finance market and providing innovative financial solutions.
Meanwhile, Majed Al Ghamdi, CEO of Retail at SNB, confirmed that their long-term partnership with SRC will enable them to provide housing finance solutions that fulfil the needs and requirements of Saudi families.
“The liquidity generated through this partnership will enable us to provide more home financing solutions to citizens in the kingdom, broadening our already-large beneficiary base. The partnership also provides us with the capital and risk management tools that are critical to our overall operations and capital allocation to achieve the objectives of the Housing Program – one of the Kingdom’s Vision 2030 programs,” he added.
SRC had previously signed a refinance-deal worth $2.7bn (SAR 10bn) with the Real Estate Development Fund in 2021, which aimed to “develop a robust secondary home financing market in the kingdom”.
In recent years, the home financing sector has witnessed significant growth in the number of loans, reaching 300,000 loans worth $37.3bn (SAR 140bn) in 2020. In 2021, more than 260,000 contracts worth more than $40bn (SAR 150bn) were registered.
Saudi Arabia’s target is to raise homeownership rates to 70% by 2030 under the Sakani programme – a partnership between the Ministry of Housing and the Real Estate Development Fund.
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