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RIYADH: Saudi Real Estate Refinance Co. is raising SR3 billion ($810 million) additional sukuk to boost home mortgages in the Kingdom, according to a top official. 

In an exclusive with Arab News on the sidelines of the Euromoney Saudi Arabia Conference in Riyadh last week, Fabrice Susini, CEO of SRC, said that the sukuk transactions will be closed soon. 

“We expect to close the transaction (sukuk) either by the end of this week or the beginning of next week,” he told Arab News last week. 

Susini noted that the mortgage market has been experiencing tremendous growth since 2017. 

“If I look at the numbers between 2017 and the second quarter of 2022, the number of mortgages has been multiplied by four. And the amount of mortgages granted by the banks, and the mortgage finance companies has been multiplied by three,” said Susini. 

He added: “There is a volume increase which is significant. That means you have more Saudis today who own a home, and that is a great achievement by the Ministry of Housing, and all stakeholders in the housing ecosystem.” 

Susini pointed out that the concept of Saudis regarding owning big luxurious homes is changing over recent years.

“Younger Saudis are realizing that they can be perfectly happy and have a nice livelihood in slightly smaller units, well-built and well-constructed. In a community, whether vertical or horizontal, slightly smaller, cheaper to maintain homes allow Saudis to have more money available to do something else. It is changing progressively,” he said.

Susini added that SRC is a hybrid entity, privately owned by shareholders and receiving subsidies and grants given by the budget or the Public Investment Fund. 

He added: “We have a role in public policy implementation. We are there to contribute to Vision 2030, making access to mortgages affordable to all citizens.”

Susini added that SRC is trying to reduce the cost of mortgages, while the housing ministry is trying hard to reduce the cost of the land. 

“Cost of mortgages has decreased a lot over the past year and a half. And then you have the price of the land. It is something the ministry is working on with the rest of the ecosystem,” said Susini. 

He further noted, “I can’t commit that the price will remain flat, the environment is changing. But what I can say is there is a great deal of effort to make sure that any increase is as minimal as possible.” 

Established in 2017, SRC, backed by the PIF, aims to boost the rate of Saudi homeownership to 70 percent by 2030 in line with the Kingdom’s Vision 2030 initiative.

SRC is a key market player that ensures the stability of the real estate finance market by providing liquidity and facilitating access to sustainable financing solutions for homebuyers in the Kingdom.

“What we are trained to do with our product of in-house solutions is to create incentives or limits to lower the cost of the mortgages so as to be as competitive as possible for the benefit of the borrower,” he added.