50% of the income.. New decisions regarding real estate financing

Dr. Mohamed Farid, Chairman of the Board of Directors of the Financial Regulatory Authority, issued new decisions regarding mortgage properties that many citizens are applying for at the present time.

• Increasing the value of the mortgage installment by 50% of the income

The most important of these decisions is to increase the value of the real estate financing installment to become 50% of the income of the person applying for a housing unit, instead of 35% and 40% for groups with different incomes.

  This decision came in an effort by the state to increase the beneficiaries of real estate financing according to the increase in the permitted credit limit as well as the various economic variables, especially the rate of inflation, which required the need to develop rules regulating the practice of non-bank financial activities to ensure the continuity of its important role in helping individuals and institutions meet their needs, Financing and investment.

Resolution No. (191) for the year 2022 amending Resolution No. (111) for the year 2015 regulating the rules and standards for the practice of real estate financing activity aimed to face the challenges and obstacles facing the real estate finance activity by providing solutions and modifications that are commensurate with the economic and financial changes that occur in all non-banking financial markets .

• The amendment ensures an increase in the value of the financing premium

Dr. Mohamed Farid said in an official statement that the amendment included an increase in the value of the financing installment to reach 50% of the investor's total income to increase the credit limit, which gives greater flexibility to obtain appropriate financing to own a housing unit.

This amendment represents an interaction with the economic changes in the markets to counter the effects of the high inflation rate, as the Authority aims to provide financing for middle-income groups within the framework of the state's plan for financial inclusion.

• Improving the efficiency of financial markets

Farid indicated that the Authority is working continuously to find appropriate solutions and alternatives to raise the level of efficiency and competitiveness of non-banking financial markets, including the real estate finance industry.

  The Authority is keen to hold technical discussions with all entities subject to its oversight in order to review the opportunities, challenges and developments facing all relevant parties in order to take the necessary measures and issue amendments and controls that help ensure the continuity of market growth.

It is noteworthy that before the issuance of these amendments, a community dialogue session was held, called for by the General Authority for Supervision, with representatives of all active parties in the market, including real estate finance companies as well as real estate developers.

It is worth noting that real estate financing granted by companies amounted to 4.2 billion pounds during the third quarter of 2022, with a growth rate of 71.5% compared to the same period last year.