New moves will open Saudi property market to foreign lenders

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The Middle East continues to widen its appeal to overseas property investors with the news that the central bank of Saudi Arabia is now going to allow foreign companies to provide mortgages.

According to ratings agency Standard & Poor’s, the draft law which was approved last year will transform home financing and begin to address the issues surrounding the amount of new homes that are needed.

Some analysts estimate that more than 200,000 new homes a year are required and if such levels of demand could be met the population of major cities such as Jeddah, Riyadh and Dammam could increase by more than 50% by 2025.

Major housing developments that have already been announced by Saudi Arabia's Riyadh Development Authority (RDA) include an approved SAR278 billion plan for over 3,000 new housing projects in the capital city.

Infrastructure will also be upgraded with plans for three new main railway lines. Several consortiums made up of 33 companies are also currently bidding for the contracts to build a metro network in Riyadh.

There are calls for the government to streamline the development approval processes so that more affordable houses can be built, but also that current buyer expectations should be downgraded so that the younger generation accept they might not be able to afford large properties.

Developers are calling for the government to appoint an agency to regulate land prices and to instigate greater transparency to prevent price manipulation. This could be achieved by the setting up of a bank dedicated to funding new building projects.

If Saudi Arabia takes the necessary action then foreign investment funds will doubtless flood into the country. As with any transactions involving the international movement of money, the FOREX markets mean that fluctuating rates can have a significant impact. By using an established currency exchange company you can access the best rates available.

If you are looking to send money internationally, it may be a good idea to check a variety of exchange rates before committing to the one which you wish to use.

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New moves will open Saudi property market to foreign lenders

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