Saturday , March 23 2019
Breaking News
Home / International Customs / Saudi Arabia / Saudi Arabia sets up $2.9bn program to increase home ownership
Saudi Arabia sets up $2.9bn program to increase home ownership

Saudi Arabia sets up $2.9bn program to increase home ownership

Saudi Real Estate Refinance Co, a unit of the kingdom’s sovereign wealth fund, set up an SR11 billion ($2.93 billion) Islamic bond program to increase liquidity in the country’s mortgage market.

HSBC Saudi Arabia has been appointed as the sole arranger and bookrunner for the riyal-denominated program, the company said in a statement. Sukuk will be issued through multiple tranches.

Saudi Real Estate Refinance Co is fully owned by the Public Investment Fund and was set up in 2017 to increase home ownership among Saudi citizens and promote the development of a housing finance market in the kingdom.

In line with Vision 2030 objectives to improve the performance of the real estate market, the new company plans to raise the rate of home ownership among Saudis to 52 percent by the end of 2020.

Demand for real estate financing in the kingdom is expected to increase from SR280 billion in 2017 to SR500 billion in 2026.

Launched in partnership with the Ministry of Housing, and under the chairmanship of Majed al-Hogail, the Minister of Housing, SRC is expected to refinance up to SR75 billion for the kingdom’s housing sector over the next five years, reaching SR170 billion by 2026.