The recent decision of the Saudi Arabian Monetary Agency (SAMA) to issue real estate financing licenses to some banks and other financing institutions is expected to rein in the spiraling housing rent in the Kingdom.

Former head of the real estate committee at the Jeddah Chamber of Commerce and Industry (JCCI) Abdullah Al-Ahmer said, “The latest issuing of real estate financing licenses will enable an estimated 40 percent Saudis to own houses by benefiting from the growing financing facilities.”

He believed that the financing solutions offered by real estate financing establishments following the implementation of the mortgage would lead to the rejuvenation of the real estate sector and invite more investments to the sector.

Abdullah Al-Blui, chief of real estate brokers in Jeddah, said that SAMA’s new move would halt the unreasonable rise in the housing rent rates in the Kingdom noticed over the past five years. He said the rent rates in some towns had leapt by 100 percent.

Chairman of the contractors committee at the JCCI Abdullah Ridwan hoped that SAMA’s issuing of new licenses for real estate financing will lead to a boom in the housing construction sector in all provinces.

The institutions for which the SAMA recently issued the licenses include the Saudi Investment Bank, Ajel for Financing Sevices Co., Deutche Gulf Financing Co, the Inma Bank, Saudi Hollandi Bank and Bank Al-Jazirah.

Currently, the total numbers of financing institutions which have been issued licenses for real estate financing is 12 banks and eight financing companies while primary approval has been issued to 10 other financing companies, according to SAMA Governor Fahd Al-Mubarak.

Al-Mubarak stressed in a recent statement that the institutions that received preliminary licenses should complete all the required formalities at the Ministry of Commerce and Industry before Nov. 8, 2014.