DUBAI Jan 5 Saudi Arabia's central bank said on
Thursday it would allow banks to supply a bigger share of
funding for purchases of homes, as part of authorities' drive to
stimulate the real estate market and ease a shortage of
Banks will now be permitted to lend buyers 85 percent of the
value of a home, up from 70 percent previously. That will apply
to purchases of first homes by Saudi citizens.
The change will let banks offer a wider variety of products
in the market without compromising the financial stability of
the banks, the central bank said.
Last March, it raised the loan-to-value ratio to 85 percent
from 70 percent for specialised mortgage companies but did not
do so for banks. At the time, it said mortgage firms were more
able to bear increased risk associated with the change because
unlike commercial banks, depositors' money was not at risk.
(Reporting by Katie Paul and Andrew Torchia)