Question

This is Task on mortgage in Saudi Arabia Mortgage as a method to buy a house...

This is Task on mortgage in Saudi Arabia

Mortgage as a method to buy a house ( in Saudi)

One of the problems is the % of mortgage in Saudi Arabia is 3% and in the other country is higher like 90%

why its lower and what could be to achieve the % ?

Homework Answers

Answer #1

Saudi Arabia follows Islamic Banking and of the main reason for which the mortgage ratio is lying at 3% in contrast to a high of 90% of other countries because real estate developers are reluctant in building homes for people with lower earnings. Earnings are directly proportional to a lower housing mortgage ratio. Banks do provide loans (on Islamic banking terms) to those who can provide large down payments. Saudi Arabia needs to pass bills on mortgage laws so that real estate developers can involve themselves much more consciously to build houses for all income groups and hence securitization can be an alternative for banks which would allow them to use their capital more sensibly.

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