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Banking

Saudi: Can a mortgage desert bloom?

While elsewhere the mortgage market is drying up and securitization is quiescent, the biggest economy in the Gulf is trying to expand both. The finishing touches are being applied to laws on the Saudi mortgage market but it’s uncertain they will provide enough flow to meet demand for funding. Dominic O’Neill reports from Riyadh.

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THE SMOGGY SUN-DRENCHED view is from the top floor of the castle-like headquarters of Sabic, the biggest company listed on the Saudi Arabian stock market. Constrained on all sides by nothing but desert plateau, Riyadh stretches out on the rocky ground for as far as the eye can see. It is like a vast, bloated body digesting a rich, oily lunch: its veins freeways with SUV blood cells.

Housing finance companies are preparing to feast on Riyadh, eventually being supported, it is hoped, by a much stronger securitization market.

Flush with petrodollars from the commodities super-cycle, Saudi Arabia is booming. Construction, propped up by government-funded infrastructure projects, is at the forefront of this.

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