Riyadh, July 9, 2021, SPA -- The International Monetary Fund's (IMF) report on Saudi Arabia's housing sector has expected mortgage lending will continue to grow rapidly as government programs have supported housing demand and supply. This statement was in the 2021 Article IV Consultation, which was released recently. The report commended governmental programs as well as regulations to improve the legal environment, which have played a role in raising the rate of ownership to 62 percent, increasing the housing supply to as many as 334,000 units in 2020, and providing digital solutions to accelerate the housing entitlement mechanism. The report noted that the Sakani program has provided around 266,000 residential loans and free land packages in 2020. Under this program, beneficiaries can obtain subsidized mortgage loans up to SAR 500,000. Families receive a subsidy on the interest (“profit”) payment to the lender according to income level and family size. Low income households can obtain a mortgage guarantee. The value of new residential mortgage contracts increased by 84 percent in 2020 to reach SAR 136 billion, of which 96 percent were government subsidized loans. Retail mortgage lending has more than doubled over the past two years to around 18 percent of total bank credit. Real estate prices have stabilized in 2020 after falling sharply during 2015- 2019. Additionally, the first home purchases worth up to SAR 1 million are exempt from the Real Estate Transactions Tax (REET). This 5 percent tax replaced the VAT on real estate transactions in October 2020. This resulted in raising the home ownership rate from 47 percent in 2016 to 60 percent by 2020. First home purchases up to SAR 1 million are exempt from the Real Estate Transactions Tax (REET). This 5 percent tax replaced the VAT on real estate transactions in October 2020. Real estate developers added around 344,000 new housing units in 2020, an increase of 4.1 percent from 2019 of which 30 percent was supplied through the partnership with the private sector program (Shrakat) and the developers’ platform “Etmam” The report noted that digital solutions for homebuyers have speeded eligibility checks and applications and allow easier access to financial products for homebuyers. The Ejar initiative provides digital solutions for the rental market to increase transparency and efficiency, through standardizing electronic rental contracts, establishing the regulatory framework for real estate brokerage firms and providing a digital matching platform. --SPA 17:51 LOCAL TIME 14:51 GMT 0026 www.spa.gov.sa/w1582992