JEDDAH: Real estate experts expect the new mortgage law, which will come into effect in early October, to rejuvenate the sluggish real estate market in the Kingdom.
Abdullah Al-Ahmari, chairman of the Real Estate Appraisal Committee at the Jeddah Chamber of Commerce and Industry, said: “The mortgage law is expected to be implemented early next month after the completion of the legislation of all related regulations and its clear interpretation. Investors, financiers and developers in the field are looking forward to the implementation with hope of better performance of the sector,” Al-Ahmari told Arab News yesterday, adding that the new regulations will serve as road map for the revival of the real estate sector.
He demanded that the Ministry of Housing take strong steps to maintain the current housing prices.
According to recent media reports, Saudi banks have started dismantling real estate companies that have been operating as their subsidiaries in anticipation of the implementation of the new mortgage laws that will enable them to make direct deals with customers and register properties in the names of the banks unlike in the past. Earlier local banks had to launch subsidiary commercial establishments or real estate firms to undertake selling and buying houses or financing the property deals of housing projects.
Dealers in the real estate market said they expect progressive changes in the field when the new rules are implemented. They believe that the new rules will affect property pricing.
However, local newspapers have reported that the new mortgage regulations will not affect 60 percent of existing housing units because they were not built in line with "the code of Saudi construction regulation," which is not mandatory but only optional for housing units.
Abdullah Ridwan, chairman of the National Committee for Contracting at the Council of Saudi Chambers of Commerce and Industry, said most of the engineering consultancy firms ignore the construction code despite its importance in building construction. “It is the responsibility of municipal authorities to enlighten the people about the Saudi construction code,” he said, adding that the code is a norm rather than specification.
He also said the executive statutes for the implementation of the mortgage law have not been issued but are expected to comprehensively cover the real estate market without exception. He stressed the need to educate people about the new regulations, as the mortgage law is far from familiar to most people.
Mortgage law to come into force in early October
