Saudi Arabia’s central bank plans to launch an “affordable mortgage” programme to finance residential purchases for Saudi citizens, it said in a statement on 29 February.

The central bank said it had completed coordination with the housing and finance ministries to develop the scheme.

It did not specify when the programme would start or give details of its size or eligibility requirements.

Under the scheme, homebuyers would be responsible for an advance payment of 15 per cent of the property’s value.

Commercial banks would supply a further 70 per cent, as well as an additional 15 per cent that would be guaranteed by the Finance Ministry.

Earlier this year, Saudi Arabia said it plans to spend SR1.5 trillion ($400bn) on building 1.5 million homes for Saudi nationals in the next seven to eight years.

Fuelled by the need for more affordable homes across the kingdom’s urban areas, and in a bid to raise home ownership from today’s 36 per cent of the population, Saudi Arabia’s real estate market is set for changes, with analysts predicting a spike in small development launches in the coming years.

Falling sales prices and speculation surrounding the new white land tax has, however, increased uncertainty and resulted in few new project launches in recent months.