Reduction in Downpayment on Saudi State-Facilitated Mortgages Could Benefit Thousands

Reduction in Downpayment on Saudi State-Facilitated Mortgages Could Benefit Thousands
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A recent reduction in the minimum downpayment required for state-facilitated mortgages in Saudi Arabia could benefit hundreds of thousands of applicants who currently do not own their home.

The new reduction, first announced in February, now only requires applicants registered at the real estate fund to pay 15% of the housing unit value instead of the previous 30% to qualify for the mortgage system.

The move could benefit up to 450,000 Saudi nationals, the Saudi Gazette reported on Monday. Economist Hani Al-Khatib says that currently 2.4 mn Saudis are on the waiting list for government support to obtain housing units, adding that 60% of the population do not own their own home. This figure conflicts with the official figures that have recently come under heavy criticism.

Saudi Arabia is struggling with a housing crisis at a time where salaries are dropping due to low oil prices. This means that so far government programs to solve the crisis have largely been unsuccessful as many homebuyers were not able to actually buy units constructed through government programs. This has already led to some anger among the population, aimed at the housing ministry, recently slamming the minister for a ‘preachy’ tweet.

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