Saudi Arabia is preparing a major expansion of its real estate financing market, with plans to roll out property-backed sukuk worth as much as 150 billion riyals ($40 billion) by the end of the decade, according to local media reports.
The proposed programme is expected to unfold gradually, with annual issuances estimated at around SAR20 billion beginning once regional geopolitical tensions ease. The comments were attributed to Municipalities and Housing Minister Majid Al-Hogail during discussions at the World Urban Forum held in Azerbaijan.
The planned sukuk drive reflects a broader effort by the Kingdom to diversify funding channels as domestic banks shoulder mounting demands tied to Vision 2030’s vast pipeline of giga-projects and infrastructure developments. Liquidity pressures in the banking system have increasingly pushed policymakers to explore capital market alternatives for long-term housing and property finance.
Saudi Arabia has already been laying the groundwork for a deeper mortgage and refinancing ecosystem. Last year, the Saudi Real Estate Refinance Company (SRC), backed by the Public Investment Fund, established a $5 billion international sukuk programme on the London Stock Exchange. The company has since issued $2 billion in sukuk, drawing investor demand reportedly six times higher than the amount offered.
At the same time, authorities continue tightening oversight of the property sector. Al-Hogail said the government recently completed a new package of market regulations, including executive rules linked to fees on vacant real estate assets. The measures follow earlier policies targeting undeveloped urban plots, commonly referred to as “white land” fees.
The regulatory push is designed to improve land utilisation, stabilise pricing dynamics and support housing supply as the Kingdom accelerates urban expansion and private-sector participation in real estate development.
