Mortgage industry in Saudi Arabia: outlook

Total volume of mortgages to GDP in Saudi Arabia is less than 5%, whereas in the developed countries the ratio is 70% to 80%. Yasser Abu Ateek, CEO of Dar Al Tamleek talks about the mortgage industry in Saudi Arabia.

He says, “There are only 200,000 people who have borrowed to buy their homes through banks and mortgage companies out of 4.6 million outstanding homes right now (estimated housing inventory). We have huge potential. We need to take off. The timing is good for mortgage companies. SAMA has accomplished a very important thing last month. In that they reduced the down payment for mortgage companies to 15%. A lot of people ask the question “why mortgage companies?” I think we have to go back, “why were mortgage down payments 30% in the first place?” The 30% took place because SAMA wanted to protect depositors’ money. Banks work with depositors’ money, so they want to protect that. They are trying to follow best practice from around the world, mainly to protect consumer’s money. “