RIYADH, Mar 05 (Arab News): Saudi Arabia's real estate loans surged 15.12 per cent year on year to a record SR883.3 billion ($235.54 billion) by the end of 2024, driven by robust demand from both retail and corporate borrowers, official data showed.
According to the Kingdom's central bank, also known as SAMA, corporate real estate loans saw a 26.23 per cent increase, reaching SR202.04 billion, while lending to individuals accounted for 77.13 per cent of the total, climbing 12.19 per cent to SR681.24 billion.
Real estate financing now comprises around 30 per cent of total Saudi bank loans, which stood at SR2.96 trillion at the end of 2024.
This evolution signals growing confidence in the Kingdom's market, with institutional capital fueling the expansion of high-end commercial hubs and integrated residential complexes - key pillars of Saudi Arabia's economic diversification strategy.
"The market is reaching a high level of sophistication as local and international institutional investors take an overweight position with a medium to long term view," Elias Abou Samra, CEO of Rafal Real Estate, told Arab News.
"Such investors are more bankable than the typical retail investor with better access to corporate lending," he added.
This divergence suggests that while individual buyers continue to fuel the bulk of the market, corporate clients are increasingly taking advantage of favorable financing conditions to invest in large-scale, mixed-use projects.
These corporate investments often involve sophisticated financing arrangements and long-term planning that cater to a broader vision of urban development under Saudi Arabia's Vision 2030.
Abou Samra noted that mega projects such as Sports Boulevard and King Salman Park are attracting global investor interest as they progress into their initial development phases.
"During the post-COVID years between 2021 and 2023, a number of developers mushroomed with granular low-rise developments that were mainly funded by off-plan sales, with marginal reliance on corporate lending," Abou Samra said.
"The profile of today's projects are mixed-use with a reasonable concentration of commercial and income generating developments demanding higher reliance on debt as a major source of funding," he added.
As these mega projects unfold, the influx of institutional capital not only supports the scaling and sustainability of these ventures but also contributes to a more stable and diversified real estate market in the Kingdom.
When asked whether real estate companies have partnered with Saudi banks to facilitate property purchases, Abou Samra explained that the Ministry of Housing has developed an integrated value chain covering every stage of the real estate development process - from planning and financing to construction, sales, and post-sale services - all within a highly regulated framework.
This comprehensive system not only ensures adherence to national standards but also streamlines processes to minimize delays and inefficiencies for developers, according to Abou Samra.
Since 2024, RAFAL, has aligned its community development strategies with this government-led approach by operating under the National Housing Co.
This partnership enables the real estate company to leverage the ministry's end-to-end solutions, ensuring its projects benefit from streamlined financing options, faster loan origination, and efficient off-plan sales mechanisms.
As a result, the company enhances its operational efficiency and is well-positioned to meet the growing market demand for quality, well-regulated residential and mixed-use developments.
Abou Samra noted that in its latest development, Tilal Khuzam - located just west of King Khaled International Airport - nearly 3,600 apartments were introduced to the market.
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