The News
In a first for the Gulf, Saudi Arabia is set to launch residential mortgage-backed securities as part of its push to make homeownership more affordable.
The Public Investment Fund’s Saudi Real Estate Refinance Co. and Hassana Investment Co., a government pension fund, agreed to begin issuing the financial instruments, famously linked to the 2008 global financial crisis and which remain crucial in the US housing market.
The initiative aims to lower interest rates and improve liquidity, with Saudi banks’ mortgage lending reaching a near three-year high of SAR10.06 billion ($2.7 billion) in November.
Rising property prices, driven by limited housing stock, have increased the urgency of government intervention: In August, the PIF’s home financing unit partnered with BlackRock to help achieve Vision 2030’s target of 70% Saudi homeownership.