Saudi Arabia tries to boost home ownership in deals with U.S. firms

Five agreements signed with U.S. finance and property firms during last week’s visit to America by Saudi Arabia’s Housing Minister, including with BlackRock and Apollo Global Management, should give a further boost to the kingdom’s rapidly growing home construction industry.

The preliminary deals aim to strengthen the mortgage refinancing market, expand property funding and attract foreign investments. With Minister of Municipalities and Housing Majid Al-Hogail looking on, the Saudi Real Estate Refinance Co. – owned by the Public Investment Fund – signed agreements with BlackRock and King Street Capital that are meant to diversify funding sources through the fixed-income market.

The Saudi Mortgage Guarantee Services, known as Damanat, also signed two partnership agreements with BlackRock and Apollo to develop investment strategies and funds for real estate financing. Al-Hogail’s ministry, meanwhile, signed a preliminary agreement with K. Hovnanian Homes, a New Jersey-based developer hired to build more integrated residential communities in Saudi Arabia.

The kingdom has set a goal to increase home ownership to 70% by 2030 from its current level of about 60%. The new agreements aim to facilitate reaching the target by making it easier for Saudi citizens to find new homes and finance the purchases.