Saudi Mortgage Market Recovers After Weak H1 2026

Saudi Arabia's residential mortgage market showed early signs of recovery in mid-2026 after a soft start to the year, New mortgage contracts fell about 21% in the first half of 2026 compared with the same period of 2025, while the total value of new mortgages dropped roughly 30%.

The average monthly volume of new residential mortgage financing in the first half of 2026 stood at about SAR 5.4 billion, down 31.3% year-on-year and about 2.3% below the 12-month average of SAR 5.5 billion. In the first four months of the year, contracts declined 25% and total lending fell 34%.

The turning point came in April 2026, when bank mortgage lending to individuals reached about SAR 6.33 billion, up 0.5% year-on-year — the first increase after nine straight monthly declines. Around 9,600 contracts were signed that month, with an average loan value of about SAR 661,000, down 14% year-on-year. Villas made up about SAR 4.19 billion (66% of the total), apartments about SAR 1.78 billion, and land plots about SAR 356 million. Financing companies added about SAR 265 million, up 24%.

Momentum continued in June 2026, when bank lending rose 7% year-on-year to about SAR 5.7 billion, a 30% jump from the previous month. Banks signed about 8,800 contracts, with an average loan value of SAR 645,400, down 10%. Villas accounted for about SAR 3.63 billion, or 63.7% of the total. May remained weak, with new mortgages of about SAR 4.4 billion, down roughly 56% from May 2025.

For residents and expats planning to buy a home, the figures point to a market steadying after a slow period. Full-year 2025 saw new residential mortgage lending of about SAR 80.4 billion, down 12% year-on-year.

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