Business | Banking
Saudi Arabia banks invest 13.4b riyals in properties
Saudi banks pumped 13.4 billion Saudi riyals into real estate projects in the Kingdom during the first half of 2006, according to sources at the first Euro-money Saudi Arabia Housing Finance Conference.
- By Mariam Al Hakeem, Correspondent
- Published: 00:00 January 21, 2007
Riyadh: Saudi banks pumped 13.4 billion Saudi riyals into real estate projects in the Kingdom during the first half of 2006, according to sources at the first Euro-money Saudi Arabia Housing Finance Conference.
The conference, which was held in Riyadh, brought together delegates from government ministries and agencies.
One official at the conference noted that the housing market in the Kingdom will be shaped by demand from a new generation of middle class Saudis, rather than led by investment.
To meet that demand, he said, Saudi Arabia will need to build 1.5 million new homes by 2015.
The Saudi government is already working to push the real estate sector ahead.
Earlier it announced it would raise the capital of the Real Estate Development Fund (REDF) by nine billion riyals (Dh8.8 billion), effective the beginning of 2006.
The move boosted REDF's capital to 92 billion riyals.
The increasing population growth rate, coupled with strong demand for housing units in Saudi Arabia, are forcing companies to find other tools for financing the real estate sector, aside from government.
Official reports indicate that about 55 per cent of Saudis own their own houses.
Although the Saudi government has exerted significant efforts to solve the problem of housing through the support of the REDF, a number of real estate insiders believe that private institutions, including banks, have to play a greater role.
The REDF was established in 1974 to meet the needs and aspirations of the Kingdom's citizens by helping to raise the quality of life in society through the development of high quality housing.
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