Saudi Banks’ Loans Reach $711.5 Billion, Fueling Growth in Real Estate and Construction Sectors
In a recent report, the Saudi Central Bank revealed that Saudi banks’ loans totaled an impressive SR2.67 trillion ($711.5 billion) in March, marking an 11 percent increase compared to the same month in 2023. The surge in loans was driven by both personal and corporate borrowings, with real estate activities and utilities sectors being the main recipients of the funds.
Real Estate Sector Sees Major Boost in Financing
Real estate financing for corporate dealings experienced a significant uptick of 27 percent in March, reaching a total of SR275.2 billion. This surge in real estate projects has led to a higher demand for debt-based financing, primarily sourced from local banks. The Kingdom’s real estate market is estimated to grow from $69.51 billion in 2024 to $101.62 billion by 2029, showcasing a promising outlook for the sector.
Residential Mortgage Loans Hit 14-Month High
New retail residential mortgage loans saw a notable increase in March, reaching a 14-month high at SR7.63 billion. Home purchases accounted for the largest portion of new mortgages, with apartment loans showing the most significant growth at 28 percent. The influx of expatriates into the Kingdom and government initiatives aimed at modernizing the financial system are contributing factors to this growth.
Growth in Other Sectors
Apart from real estate, lending for electricity, gas, and water supplies also saw a substantial increase of 27 percent in corporate loans, reaching SR147.42 billion in March. Sectors such as professional, scientific, and technical activities, education, and administrative services also experienced growth in financing, indicating a diverse expansion across various industries.
Saudi Arabia’s Economic Growth and Future Projections
With rapid economic and population growth projected in the coming years, Saudi Arabia continues to invest in infrastructure projects to meet rising demands for resources. The country’s focus on knowledge-based industries and innovation is expected to drive further advancements and investments, aligning with the nation’s ambitious developmental goals.