Saudi banks’ real estate lending hobbles after 2018 ascent: SAMA

Saudi banks’ real estate lending hobbles after 2018 ascent: SAMA

RIYADH: After leading an ascent that began in 2018, Saudi banks’ real estate lending has slowed down over the past year caused by a decline in growth in the retail sector, according to the Saudi Central Bank, also known as SAMA. In the second quarter of 2021, the real estate lending growth rate halved to 5.4 percent from 10.8 percent in the first quarter of 2021. Although real estate loans by banks increased by SR28.2 billion ($7.5 billion) between January and March 2021 to SR502.7 billion between April and June 2021, their growth rate decelerated compared to the past six quarters. Moreover, this decrease in the growth trend has continued throughout the second quarter, where the total value of real estate loans stood at SR638.7 billion. This dip came after a reduction in real estate bank loans to individuals who suffered the same fate since the quarter ending June 2021. As a result, the bank loan growth rate stumbled from 13.6 percent to 5.7 percent in this quarter. However, this was not the case during the coronavirus pandemic. Saudi banks’ real estate lending surged 133 percent from SR215.6 billion in the second quarter of 2018 to SR502 billion in the