Mortgage tightening sees saudi arabia sales slump

Mortgage tightening in Saudi Arabia has prompted sales to slump since last year, according to JLL.

The curbs, which were implemented in November 2014, now limit a buyer to borrowing a maximum of 70 per cent of a property's sale price. The measures were designed to avoid a bubble in Saudi Arabia, but the number of house sales in Riyadh between the introduction of the rules and the end of March 2015 has fallen 70 per cent compared to the same period a year ago.

"Recent changes to mortgage regulations have resulted in a shift in demand away from residential sales to rentals," explains Jamil Ghaznawi, national director and country head of JLL Saudi Arabia.

He told Reuters that the trend is expected to continue.