Data released by the Saudi Central Bank showed strong growth in the real estate financing market during the first quarter of 2025, with mortgage loans increasing by 15% year-on-year to reach approximately SAR 950.66 billion. This rise is not merely an economic figure; it reflects the profound transformation in the real estate sector as a key pillar of Saudi Arabia’s Vision 2030.
This growth confirms the increasing demand for homeownership, supported by government initiatives aimed at raising the percentage of Saudi households owning homes. Individuals accounted for 76% of total real estate financing, totaling over SAR 721 billion. This success highlights the effectiveness of government and banking initiatives that enable citizens to access affordable housing finance, such as subsidized housing programs and simplified mortgage processes.
On the other hand, companies and real estate developers accounted for approximately 24% of total mortgage loans, or about SAR 229.6 billion. This significant share indicates rising activity in real estate development and large scale projects, as these loans are used to finance massive residential projects, commercial complexes, and off-plan sales programs, aligning with urban growth objectives and improving quality of life in Saudi cities.
The dominance of commercial banks, holding 97% of total loans, also underscores the banking sector’s confidence in the stability and resilience of the real estate market, emphasizing the importance of public-private integration in supporting sustainable development.
Comparing Growth and Future Challenges
The current growth in the mortgage market continues an upward trajectory seen over recent years. For instance, mortgage loans reached SAR 760 billion by the end of 2022, growing to SAR 950.66 billion in Q1 2025 an increase of over 25% in less than three years. This rise reflects growing confidence among investors and individuals in the real estate sector.
However, several challenges require careful monitoring, such as rising debt levels relative to household income and the impact of sudden global interest rate changes on borrowing costs. Heavy reliance on loans may also put pressure on household financial stability during economic fluctuations, highlighting the need to balance growth with sustainable risk assessment in the future.
Increasing Liquidity and Stimulating Economic Flow
This momentum in the mortgage market, along with government facilitation, directly increases liquidity in the Saudi economy. Mortgage loans help move billions of riyals across construction, building materials, engineering consultancy, and logistics sectors, supporting economic cycles and growth in complementary industries.
As mortgage financing flows into the market, SMEs in the real estate supply chain benefit, creating a multiplier effect that boosts non-oil GDP and supports the diversification of national income sources key objectives of Vision 2030.
Foreign Ownership of Real Estate: Opening New Growth Horizons
In parallel, the law allowing non Saudis to own real estate adds a new investment dimension. It permits individuals and foreign companies to acquire property in the Kingdom under precise regulatory frameworks, especially in major cities. This step brings in foreign capital inflows, activates the real estate market, and increases investment in residential, commercial, and tourism projects.
This development also opens new opportunities for local banks to expand their financing portfolios. With growing demand from non Saudis, banks are expected to offer innovative financing products tailored to this segment, enhancing the role of the banking sector in supporting foreign direct investment in Saudi real estate and adding depth and flexibility to the market as a whole.
These inflows not only boost FDI but also stabilize the currency and reduce pressure on government spending by encouraging the private sector to fund its projects through partnerships and foreign investment.
A Message to Investors: Unprecedented Opportunity in a Promising Real Estate Market
For local and international investors, the present moment represents a strategic opportunity to enter or expand in the Saudi real estate market. With available financing, flexible regulations, and openness to foreign investors, Saudi Arabia’s real estate environment is more mature and stable than ever.
Whether you are an individual investor seeking long-term residential returns or a development company aiming to enter large scale projects, today’s Saudi market offers:
Advanced and incentivizing regulatory frameworks
Rapid population and urban growth
State-supported housing programs
Financial facilities and guarantees from banks
Transparent access for foreign investors
In short, Saudi Arabia is no longer just a local market; it has become a regional and global hub for smart and sustainable real estate investment.
An Integrated Vision Toward 2030
These data show an integration between enabling citizens to own homes, expanding corporate participation, attracting foreign investors, and achieving higher liquidity levels in the local economy. With the Central Bank continuing to adopt flexible financial policies, the real estate market is poised for further momentum and growth, driven by a clear vision toward a prosperous society and a diversified, sustainable economy.
