Saudi Arabia Strengthens Housing Sector with Key Agreements
In a move to enhance its housing sector, Saudi Arabia has solidified its international partnerships by signing five crucial agreements with major US companies in real estate development and financing.
These deals are aimed at boosting the Kingdom’s mortgage refinancing market, expanding property funding options, and attracting foreign investments.
Through its housing program, Saudi Arabia has revolutionized the sector by increasing financial access, simplifying regulations, and offering a variety of market choices. The new real estate initiatives are set to address the housing shortage and create employment opportunities for citizens.
These reforms are propelling the Kingdom towards its 2030 goal of achieving 70 percent homeownership and ensuring that every family can own their dream property.
By 2022, homeownership has already seen an increase from 47 percent to over 60 percent.
The agreements were signed in the presence of Saudi Arabia’s Minister of Municipalities and Housing, Majid Al-Hogail, before the conclusion of his official visit to the US on Aug. 25, as reported by the Saudi Press Agency.
During his visit, the Saudi Real Estate Refinance Co. inked two MoUs with BlackRock and King Street to advance the mortgage refinancing sector by expanding it through both local and international capital markets.
These partnerships are aimed at diversifying funding sources through fixed-income markets, thereby attracting more foreign investments to Saudi Arabia.
Additionally, the Saudi Mortgage Guarantee Services Co., also known as Damanat, signed two partnership agreements with BlackRock and Apollo to develop investment strategies and funds for real estate financing. These agreements are intended to broaden the base of local and global investors and contribute to the sustainable growth of the real estate market.
Damanat, which is fully owned by the Saudi Real Estate Development Fund, was licensed by the Saudi Central Bank in 2023 to provide general and savings insurance along with mortgage provision. With a capital of SR18 billion ($4.79 billion), the company aims to help achieve the housing objectives of Saudi Arabia’s Vision 2030 by encouraging firms to offer subsidized home ownership financing solutions.
Another MoU was signed between the Ministry of Municipalities and Housing and K. Hovnanian ME, a company renowned for developing 500,000 housing units in the US, to construct more integrated residential communities in Saudi Arabia, according to SPA.
Al-Hogail engaged in discussions with various US government officials, heads of construction and real estate development companies, and financial institutions during his visit. The meetings were focused on strengthening bilateral relations, establishing partnerships, sharing expertise, and attracting successful international practices in housing, real estate, and urban development.