RIYADH, Saudi Arabia, March 7, 2019 /PRNewswire/ -- The Second Housing Finance Conference concluded yesterday, Wednesday March 6, 2019, under the patronage of the Housing Minister Majed bin Abdullah Al-Hogail and with the attendance of Khalid Mohammed Al-Amoudi, Director General of Real Estate Development Fund (REDF), investors, experts and representatives from the public and private sectors.
"We've significantly improved our service to citizens by building our real estate finance system – but we've only just started," says Saudi Housing Minister.
The Housing Minister and Chairman of REDF's Board of Directors Majed Al-Hogail confirmed in his speech that completing the real estate finance system will lead to a significant and sustained rise in home ownership in the Kingdom and make major strides towards realizing the 70% target of Vision 2030.
At the same time, Al-Hogail emphasised the real estate sector's high growth during this period citing the signing of more than 9,000 real estate finance contracts worth more than SR 4.7 billion.
The Minister stressed during his interview and speech, that completing the mortgage system allows citizens to choose between 18 entities to obtain an appropriate financing option. The completed solutions will have a direct positive impact on real estate development sector. This step will be reflected in providing more residential options and meeting the citizens' desires.
Al-Hogail further noted that residential project size has increased through the partnership between the Ministry of Housing and real estate developers, which provide housing units within an integrated housing environment. At the same time, 45 projects have been implemented across all regions.
"In the past, the private sector's contribution to real estate finance did not exceed 35%. Now more than 25000 contracts have been signed in the past year. This year, we aspire to exceed 125,000 financing contracts. We also estimate that the investment volume in the real estate sector will reach SR 60 billion this year," he added.
His Excellency pointed out to the housing programme policies (one of the vision 2030 programmes), which have been integrated by the efforts of 16 government agencies to overcome all obstacles that prevented the Ministry of Housing implementing initiatives which would enable citizens to own housing units, especially the funding and housing support process. At the same time, the real estate finance figures have significantly increased, since 2018's fourth quarter. In addition, the government provided many enablers that contributed to appropriate real estate financing options through loan guarantees programmes, first settlement reduction and supported profits. A Saudi company also works in refinancing and pumping liquidity into the market through buying portfolios and providing fixed interest extending for 25 years. Since 2018, the company deployed SR 800 million. However, the company would target, this year, to reach more than SR 10 billion.
Meanwhile, the Director General, REDF Khalid Al Amoudi said, "As a result of REDF's mission and responsibility, we created products and financing solutions to enable all segments of our society to own the first housing unit. This move enabled REDF to enhance the mortgage market' growth. In the second quarter of 2017, the growth share of subsidized mortgage financing did not exceed 2% of total mortgage contracts in the market. However, the share of subsidized financing contracts provided by REDF reached 81% of total mortgage contracts in the Kingdom by the end of 2018. At the same time, Al-Amoudi also emphasized the REDF is careful to balance between the supply and the growing demand rate in the local real estate market.
Al-Amoudi stressed the right of citizens to home ownership, and looks to make that happen by empowering the government and private partners to provide a convenient and rewarding home ownership journey at the right quality and price. He confirmed that REDF's strong track record of partnerships with the private sector makes the fund well-positioned to provide housing products and services that suit the needs of Saudi citizens.
He said, "In 2018, REDF provided SAR 1.5 billion worth of loans, and we expect the number of citizens served between 2017 and 2020 to reach around 480,000 citizens. We continuously reinvest REDF's assets to enhance financial solvency and generate returns to bolster financial sustainability."
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SOURCE Real Estate Development Fund