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Saudi Real Estate Refinance to buy mortgage portfolio from pension agency
SAUDI Real Estate Refinance Co (SRC), the Saudi equivalent of US mortgage finance business Fannie Mae, said on Sunday that it has agreed to buy a mortgage portfolio worth over 3 billion riyals (S$1.11 billion) from the Saudi Public Pension Agency (PPA).
Fabrice Susini, the chief executive officer of SRC, said in a statement: "The deal provides liquidity to the real estate financing market, which in turn is expected to bring lower prices and increase the number of mortgage originations - leading to SRC's goal of improving homeownership rates in the Kingdom."
SRC, a wholly-owned subsidiary of Saudi Arabia's sovereign wealth fund, the Public Investment Fund, works with developers and local banks to counter a shortage of affordable housing by injecting liquidity into the real estate market.
Among the goals of the Vision 2030 reform programme promoted by Crown Prince Mohammed bin Salman, the kingdom aims to raise home ownership to 70 per cent by 2030.
Mohammed Al Nahhas, the governor of PPA, said: "This agreement will help the liquidity in the market and help us provide more mortgages to people to buy homes." The deal comes amid a severe downturn in the Saudi economy, battered by the coronavirus crisis and lower oil prices.
Mr Susini had said in April that he expected only a temporary slowdown in the Saudi mortgage market caused by measures to contain the spread of the virus. REUTERS