For 2011, Saudi Arabia announced the largest budget ever of SR580 billion. Custodian of the Two Holy Mosques King Abdullah has issued a decree aiming to improve living conditions of all Saudi citizens. For example, the capital for the Real Estate Development Fund has been increased to SR40 billion, and the size of the loans has risen from SR300,000 to SR500,000. Under the supervision of the General Commission for Housing, a project totaling SR250 billion was announced to build 500,000 residential units in all regions.
Experts feel that such project will develop the real estate sector and allow most Saudis to own houses. It also increases the standard of living and can improve the social fabric of society through community building. However, the decision has been suspended until the construction of 500,000 residential units, which has made most Saudis very pessimistic.
Arab News spoke to real estate experts to know more about the mortgage program and how it could help Saudis to own houses.
Talal Samrqandi, head of consultation engineering offices in Jeddah Chamber of Commerce and Industry, said a mortgage program could help Saudis to own houses at affordable prices, but the program needed time to be implemented perfectly.
 “A mortgage program has to be implemented after other requirements are taken care of. Saudis cannot own houses because of high prices of land and real estate, which have increased by 100 percent. In the past too, owning a house was impossible, because banks offered loans with eight percent profits. Now, banks have decreased this to 3 percent,” he said.
He added: “The launch of a mortgage program would decrease the demand in the real estate sector by 15 to 20 percent. Unfortunately, most community segments are already registered with the mortgage program. Fifty percent of them are poor, while the other half are middle class families.” According to Samrqandi, the mortgage program list is full now. As a result, it does not allow new applications anymore.
 “The plan was to build 500,000 residential units, but that would not be enough. It covers only 25 percent of the country’s need. Statistics by the Ministry of Public Work and Housing indicated that they received more than two million loan applications, which is why they stopped receiving applications,” he said.
 “The Ministry of Public Work and Housing has to take into consideration several points before establishing the mortgage program. These points include offering building materials with suitable prices to avoid lack of materials, allowing all investors to implement the building projects, hire observers to control the mechanism of building houses to suit with Saudi society lifestyle, and cooperate with banks that offer loans for Saudis. The government pays the profits, which would be only 3 percent.”
Manar Al-Munif, General Electric executive manager of Middle East and Pakistan, confirmed that only 20 percent of Saudis own houses in the Kingdom. The other 80 percent rent them. “The absence of a mortgage program is increasing the difficulties of owning a home in Saudi Arabia. For the last 30 years, we have been calling for this program,” said Al-Munif. She added: “Banks still make huge benefits of housing loans. They decreased the profit rates, but they are still high. A person who takes a loan of SR300,000 has to pay SR150,000 as profits.”
Abdullah Al-Zahrani, a Saudi employee who receives a monthly salary of SR25,000, said the dream of owning a house in the Kingdom had become impossible due to the high prices. 
“In the past, when my salary was SR15,000, it was my dream to own a house in Jeddah. Recently, I realized that I would never be able to own a house in Saudi Arabia, even though my salary increased to SR25,000. Average land price in a middle-class area is SR680,000, and I have to pay SR100,000 in cash which I do not have. The bank does not give a loan to a customer, but buy the land itself. The building could cost around SR1,000,000; no bank would offer this amount of money,” he said.
He added, “If I want to buy a two room apartment, this could cost me SR700,000. No Saudi family is willing to live in such a small house.”