黑料社区

Saudi real estate loans up 15%, hitting $246bn

Saudi real estate loans up 15%, hitting $246bn
Government-backed housing programs helped drive home ownership from under 50 percent a decade ago to over 65 percent by 2024. Shutterstocj
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Updated 25 July 2025

Saudi real estate loans up 15%, hitting $246bn

Saudi real estate loans up 15%, hitting $246bn

RIYADH: Real estate loans by 黑料社区鈥檚 commercial banks climbed to a record SR922.2 billion ($245.9 billion) in the first quarter of 2025, marking an annual increase of just over 15 percent.

Based on data from the Kingdom鈥檚聽central bank, also known as SAMA, this expansion is the fastest year-on-year growth in nearly two years, and underscores a robust resurgence in property financing.

This was driven chiefly by a surge in lending to commercial real estate projects even as home mortgages, which still form the lion鈥檚 share, grew at a more moderate pace.

Saudi banks鈥 retail mortgages, which are primarily home loans to individuals, accounted for about 75.8 percent of total outstanding real estate credit in the first quarter, reaching SR698.8 billion.

This represents an 11.7 percent year-on-year rise. Corporate real estate loans 鈥 the funding provided to developers and commercial ventures 鈥 grew nearly 27.5 percent over the same period to SR223.4 billion, outpacing the retail segment鈥檚 growth several times over.

Although smaller in absolute terms, the corporate real estate portfolio has been expanding at its fastest pace in almost a decade according to SAMA data, boosting its share of total real estate credit to roughly 24 percent and signaling a significant shift in banks鈥 lending focus.

Drive to boost home ownership

This marked rebalancing comes after a prolonged period during which Saudi bank lending was largely fueled by residential mortgages. Over the past few years, government-backed housing programs helped drive home ownership from under 50 percent a decade ago to over 65 percent by 2024.

That mortgage boom saw banks鈥 loan books tilt heavily toward retail customers. Now, a structural pivot is underway. Companies and developers have become the dominant force in credit growth as banks pivot from consumer finance to funding large projects and enterprises.

Business loans across all sectors now make up 55.3 percent of Saudi bank lending as of May according to SAMA data, up from about 52.9 percent a year ago, with corporate credit growing over 21 percent year on year, more than double the 10 percent rise in personal lending.

Bank credit to real estate has accelerated in tandem with high-profile initiatives, from new residential communities in major cities to the gigantic NEOM smart city, as well as Red Sea tourism resorts and other large mixed-use projects that require substantial funding for land acquisition, construction and development.

The momentum is further bolstered by upcoming global events like the 2030 FIFA World Cup and Expo 2030, which are expected to inject capital and spur even more infrastructure and real estate development in the lead-up to those events.

This reflects massive projects such as new airports, rail lines, and ports that are moving ahead and require significant funding. The government鈥檚 National Transport and Logistics Strategy envisages about $150 billion in infrastructure investments by 2030, with 80 percent of that expected to come from the private sector via public-private partnerships.

Accordingly, banks are playing a pivotal role by lending to contractors and logistics firms involved in these ventures, ensuring that crucial projects have the financing they need.

Policy support and bank strategies

Saudi authorities have actively fostered an environment to support this lending shift toward commercial projects. Strengthening the real estate and financial sectors is a key goal of Vision 2030, and the government has rolled out measures to encourage private investment in large developments.

One major approach is the promotion of public-private partnerships and improved financing mechanisms to draw in non-government capital. The government is collaborating with banks and investors to streamline funding for mega-projects, including establishing new specialized financing companies and joint venture models that ease funding constraints.

The Private Sector Participation Law enacted in 2021 provides a transparent legal framework for domestic and foreign investors to take part in infrastructure and real estate projects alongside the public sector.

By simplifying regulations, offering incentives, and even initiating early phases of key projects itself, to demonstrate viability, the state aims to boost private-sector confidence and lending to these ventures.

These initiatives are creating a more conducive climate for banks to extend credit to corporate clients, knowing that many projects have government backing or facilitation.

At the same time, Saudi banks themselves are adapting their strategies to sustain the lending boom while managing risks. Banks remain well-capitalized and have robust capital buffers, with sector-wide capital adequacy around 19 percent according to SAMA data, enabling them to expand credit without compromising stability.

Many lenders are also exploring innovative ways to unlock liquidity and fund new loans.聽

Industry analysts point out that banks are considering mortgage securitization, converting pools of home loans into bonds that can be sold to investors, as a means to free up balance sheet capacity.

A recent report by Fitch Ratings likewise noted that turning mortgage assets into tradable securities would expand 黑料社区鈥檚 debt market and give banks an additional funding boost.

Such financial agility, combined with disciplined cost control and solid deposit growth, positions the banking sector to actively support the Kingdom鈥檚 development priorities and finance Vision 2030 initiatives on a larger scale.

Saudi interest rates, which move in tandem with US Federal Reserve policy, have risen to their highest levels in nearly two decades, a factor that might ordinarily cool credit demand.聽

However, the strategic importance and expected returns of mega-projects mean that demand for credit remains strong even in a high-rate climate.

Many large-scale developments benefit from government guarantees or contracts that make bank financing viable despite higher interest costs, and banks are competing to syndicate and participate in these deals.


Teaching machines to speak Arabic

Teaching machines to speak Arabic
Updated 06 November 2025

Teaching machines to speak Arabic

Teaching machines to speak Arabic
  • Innovation is helping AI understand the region鈥檚 language, culture, and voice

JEDDAH: As developers across the Arab world work to formalize Arabic for artificial intelligence 鈥 grappling with its many dialects, limited datasets, and deep cultural nuance 鈥 English-based AI systems have continued to surge ahead. Now, industry experts say it鈥檚 time for Arabic users to gain the same technological momentum.

The performance gap between Arabic and English natural language processing is most visible in speech recognition, where pronunciation, rhythm, and vocabulary differ sharply across dialects. These variations make it challenging for one model to understand spoken Arabic with consistent accuracy.

Despite these hurdles, progress is accelerating. With rising investment and government-backed initiatives led by 黑料社区 and other regional powers, Arabic AI is steadily closing in on English in sophistication and accessibility.

As Arabic AI evolves, experts emphasize the importance of cultural nuance and dialect diversity in future language models. (aramcoworld.com)

Amsal Kapetanovic, head of KSA at Infobip, told Arab News: 鈥淲hile written NLP tasks like basic chatbots can be managed with additional work, speech recognition really exposes the limitations of current models. It requires even more fine-tuning and adaptation to handle the diversity of spoken Arabic effectively. This is where the gap between Arabic and English NLP is most pronounced.鈥

Infobip鈥檚 recent collaborations with telecom and private sector partners across the Gulf reveal a similar pattern: Arabic chatbots and virtual assistants often require greater oversight in their early stages than English systems. However, once they are retrained using region-specific conversational data and Gulf dialects, both accuracy and customer satisfaction rise sharply.

Arabic remains one of AI鈥檚 greatest linguistic challenges. Unlike English, it is not a single unified language but a family of dialects stretching from Asia to Africa. Its complex morphology 鈥 with prefixes, suffixes, gender and number agreement, and the absence of short-vowel diacritics 鈥 poses major obstacles for tokenization and model training.

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Kapetanovic referenced a 2025 study published in JMIR Medical Informatics (鈥淚nfectA-Chat: An Arabic Large Language Model for Infectious Diseases鈥), which tested instruction-tuned models like GPT-4 in both English and Arabic. The research found that Arabic models still trail English by 10鈥20 percent in complex tasks.

鈥淎rabic models still lag slightly behind English ones, particularly in areas like accuracy and sentiment analysis,鈥 he said. 鈥淭his is primarily due to the smaller size of Arabic training datasets and the complexity of Arabic dialects.鈥

He added: 鈥淎rabic itself is a family of languages and dialects 鈥 much richer and more complex than many others. This diversity adds another layer of challenge.鈥

Amsal Kapetanovi膰, head of KSA unit at Infobip. (Supplied)

Yet optimism remains strong. 鈥淭he good news is that there is significant investment happening, especially in the MENA region, with countries like 黑料社区 leading the way,鈥 Kapetanovic said. 鈥淚nitiatives like Vision 2030 are accelerating progress, and we鈥檙e seeing more focus on localizing AI for Arabic speakers.鈥

Speech recognition continues to represent the most visible gap. 鈥淎 Lebanese speaker and a Saudi speaker might use different words and speak at different speeds, making it challenging for a single model to recognize and process spoken Arabic accurately,鈥 he said.

Localization, Kapetanovic explained, extends far beyond translation. 鈥淎t Infobip, we are defining the evolution of communications in co-creation with our customers and partners throughout the region. Gartner has recognized us as a Leader in their 2025 Magic Quadrant for CPaaS. We are committed to delivering the next generation of AI-powered customer conversations to unlock seamless, high-impact engagement for MENA businesses. That鈥檚 why we put a strong emphasis on localizing our AI-driven platforms and tools to serve Arabic-speaking users effectively.鈥

Technical, cultural, and ethical challenges shape the future of Arabic AI, as developers strive for inclusion and linguistic parity. (aramcoworld.com)

Real-world applications are already bearing fruit. 鈥淔or example, Nissan 黑料社区 rolled out a WhatsApp chatbot (鈥楰aito鈥) that handles customer queries in both Arabic and English,鈥 he said. 鈥淭hese bots leverage Infobip鈥檚 Answers platform, which includes built-in NLP capabilities for Arabic 鈥 such as right-to-left text support and Arabic stop-word recognition 鈥 to interpret queries and intent.鈥

鈥淔or 黑料社区 and the Gulf, we鈥檝e gone beyond simple translation by implementing features and partnerships tailored to the region,鈥 he continued.
鈥淲e鈥檝e partnered with Lucidia, a leading Saudi tech company, to co-develop solutions that address local business needs and integrate with popular regional channels like WhatsApp and X.鈥
鈥淲e鈥檝e also built language models that recognize Gulf-specific dialects and cultural expressions, making our chatbots and automation tools more intuitive for users. Additionally, our platform supports local payment integrations and business workflows unique to the region. These initiatives reflect our commitment to delivering genuinely localized technology, not just Arabic language support.鈥

DID YOU KNOW?

鈥 黑料社区 is leading investment in Arabic AI, with Vision 2030 initiatives.

鈥 AI can become biased and exclusionary if it does not speak or understand Arabic well.

鈥 Infobip鈥檚 Arabic chatbots now 鈥榯hink鈥 in Gulf dialects, improving accuracy.

Cultural understanding, he added, is key to truly human-like AI. 鈥淐ulturally aware AI should ideally be AI that understands the why behind the what,鈥 he said. 鈥淚t鈥檚 about deep research and understanding the background 鈥 not just giving straight answers to straight questions.鈥

鈥淎t Infobip, we integrate with multiple large language models and do so in an agnostic way,鈥 he said. 鈥淲e combine them and see which ones serve which purpose, giving us the flexibility to avoid pitfalls like AI hallucination or unwanted replies.鈥

The ethics of language and inclusion

Kapetanovic cautioned that neglecting Arabic in AI development poses not only technical risks but ethical ones.

鈥淭he ethical risk is that AI can become biased and exclusionary if it doesn鈥檛 speak or understand Arabic well,鈥 he said. 鈥淚f AI systems don鈥檛 handle certain languages or dialects properly, or if they lack enough regional data, they can exclude parts of the narrative or reinforce bias.鈥

鈥淚t鈥檚 essential for everyone in the AI ecosystem to contribute to making AI as inclusive and democratized as possible. Otherwise, we risk reinforcing disparities in services, information, and opportunities.鈥