Saudi Home Loans board member Sheikh Abdullatif Al Shelash shares that his company has long been a benefactor in helping Saudis obtain home financing options. With a meticulous focus on increasing homeownership throughout the Kingdom of Saudi Arabia, the business whiz emphasizes how far mortgages have come in such a short span of time.
Mortgages only became law in Saudi Arabia 11 years ago, and ever since, Sheikh Abdullatif Al Shelash explains Saudi Home Loans has been trailblazing in shaping the mortgage market there, where a two-decades-long mortgage was once considered a huge risk.
He attributes a dip in interest rates over the past 10 years to allowing Saudi Home Loans to better infiltrate the Saudi market. “[It has] also promoted the mortgage industry in a much, much better way,” Al Shelash adds.
As one of the first mortgage lenders to spearhead the Saudi market, Abdullatif Al Shelash says providing financial solutions through Shariah-compliant services has been at the forefront of Saudi Home Loans’ mission since it began in 2007.
And Saudi Home Loans hasn’t slowed its momentum in 16 years of operation. The firm announced last month that it had received a license to practice the financing of small and medium establishment and consumer financing activity as part of the business’s strategy to expand its menu of financing to accommodate the long-term goals of homeownership in the Kingdom of Saudi Arabia.
Sheikh Abdullatif Al Shelash Reveals What Sets Saudi Home Loans Apart
Customer care and satisfaction coupled with a hardworking team are some of the cornerstones of Saudi Home Loans’ success. And SHL’s contribution to Saudi society hasn’t gone unnoticed. The brand has been awarded multiple accolades, including Best Real Estate Finance Company in Saudi Arabia in 2017 by Arabian Enterprise Awards, and Best New Investment Product 2017 by the Banker Middle East KSA Awards. That same year it also won the KSA Product Award. Continuing the corporate culture of offering the best in service, on its website, Saudi Home Loans offers clients easy access tools such as a quick quote calculator, an affordability calculator, and a convenient online application process. In addition to residential financing solutions, there are commercial and retail financing options, too.
While securing home loans in previous years was a struggle, Sheikh Abdullatif Al Shelash says it’s gotten easier. “Banks are becoming right now more understanding of the real estate markets,” Abdullatif Al Shelash observes.
In another positive move to bolster mortgages in Saudi Arabia, the loan term has been lengthened from 25 years to 30 years to give borrowers more flexibility.
“Previously, if you want[ed] to get a mortgage on a home, they [would] take the assets or the home of no value when considering the mortgage applications,” Al Shelash says.
Abdullatif Al Shelash recalls working with investors in 2005 in Riyadh, Saudi Arabia’s capital city.
“They wanted to purchase a home, 400 square meters, for 800,000 Saudi riyals [approximately $213,333], and they’re coming up with cash on that,” Abdullatif Al Shelash says. “And I tell them, well, why buy cash? Just put 80,000 and mortgage the rest for 20 years, and whatever cash you have, just go and buy another land adjacent to it. That’s a much better use for your cash.”
Mortgages Matter Now More Than Ever, According to Abdullatif Al Shelash
As a financial expert, Sheikh Abdullatif Al Shelash says he’s no stranger to taking his own advice, especially when it comes to mortgages. He says he holds mortgages on his real estate purchases and it’s done with purpose. While he admits some Saudis still fear being tethered to a 20-plus year mortgage debt, it’s still a better use for one’s funds.
“There’s going to be more appreciation,” Sheikh Abdullatif Al Shelash points out. “The houses that you have purchased in 2005 for 800,000 Saudi riyals right now are valued at 3 million Saudi riyals.”
Despite only serving a fraction of the market, Al Shelash says Saudi Home Loans was one of the first companies that actually received a license from the Central Bank in Saudi and continues to be an industry leader.
“[The] mortgage business is a viable business in Saudi,” he adds.
As Saudi Arabia’s housing demands continue to increase, Abdullatif Al Shelash says it only makes sense for Saudi’s mortgage market to grow. PwC Middle East reports that in 2021, Saudi Arabia’s housing demands reached 99,600 homes — and that number is slated to double within the next seven years.
The private sector is also playing a pivotal role in Saudi’s real estate development, and Abdullatif Al Shelash says Saudi construction regulations are adjusting in a positive way. Only within the past 15 years, he says, has a crackdown on code standardizations taken place.
“Right now, we’re seeing the building codes coming out,” Al Shelash observes. “We’re seeing more regulation coming to the construction sector to really organize it for individual buildings.”
He says this is contributing to the overall value of Saudi real estate and the Kingdom’s economy.
More than $1 trillion has been invested in Saudi real estate and infrastructure with eight new cities in the works set to pop up along the coast of the Red Sea, reports S&P Global Ratings agency.
As a board member of Saudi Home Loans, Sheikh Abdullatif Al Shelash is optimistic that even more Saudis will continue to fulfill their dream of homeownership in years to come. As one of the first people to take the reins in drafting mortgage laws in Saudi Arabia, it has become a process that Al Shelash is happy to be involved in — and he’s been working toward this goal for a long time. “There was a hope for the mortgage laws to come out in 2008,” he recalls.
However, things did not change in Saudi until 2012. Now, Al Shelash says the potential for mortgage growth in Saudi Arabia has only one way to go — and that is up. Saudi Home Loans is the largest real estate finance company in the Saudi market and shows an annual growth rate of 40% in net profit over the past few years.
“We’re also seeing many innovative ideas. We’re seeing more materials are coming out, much more, better, efficient lighting that will really save energy,” he says. “Initiatives are really taking place right now to really do that kind of improvement.”