Shoura Council okays draft of mortgage law Saudi Gazette report RIYADH – Shoura Council approved Tuesday a draft of the long-awaited mortgage law, paving the way for its approval by the government to allow more Saudis to own property and for banks to diversify income sources. The approval ends a debate on four components of the mortgage law, Saudi Press Agency (SPA) reported. Shoura Council Chairman Dr. Salih Bin Abdullah Bin Humaid said the four draft regulations are the real estate financing regulation, financing companies auditing regulation, financing renting regulation and the registered real estate mortgage regulation. He stated that the regulations will help provide housing for the middle income group. Assistant Secretary General of the Council Ahamad Al-Yahya said it took three months to discuss the four regulations. However, Shoura member Abdul-Rahman Zamil told an Arabic language daily the law as it stood will not benefit 85 percent of Saudis whose monthly income is below SR5,000. “It will benefit the large real estate firms, large real estate investors, large financial institutions and the middle class,” Al-Madina newspaper cited him as saying on Monday. John Sfakianakis, chief economist at HSBC's Saudi subsidiary the SABB bank, said the mortgage law's potential impact has been “hyped up” despite a favorable interest rate environment. “The mortgage law will not necessarily be a turning point for the housing market as a lot of people have already reached their borrowing limits because of the stock market crash,” he said. “It will take more time than people envisage to solve the housing issue in Saudi Arabia ... It's not going to be done in two years.” At least two-thirds of Saudis do not own a home, against 35-32 percent in Europe and the United States, he said. Other estimates are lower, with Abdullatif Al-Shelash, managing director of Saudi Home Loans Co. (SHL), saying in remarks published in December that only 22 percent of Saudis own a home. __
