“Damanat” Reveals New Guarantee Product Contributing to Achieving First Homeownership Dream

The Saudi Housing Guarantee Services Company “Damanat” today unveiled the MGS+ guarantees product, which adds to its portfolio of guarantees provided to financial institutions. This aims to enable citizens to obtain real estate financing and achieve the dream of owning their first home. The announcement was made during a panel discussion featuring the company’s CEO, Hossam bin Youssef Radwan, at the Real Estate Future Forum held in Riyadh from January 22 to 24, 2024, under the theme “The Power of Resilience… Building a Sustainable and Prosperous Real Estate Future”, with participation from a group of economists, investors, decision-makers, and real estate sector experts an both local and international levels.

The CEO of “Damanat” explained that the new guarantee product effectively stimulates financiers and enables them to finance bank-excluded segments, in addition to its role in sharing credit risks with financiers. This, in turn, helps empower citizens and facilitate access to their first home at a low borrowing cost. Moreover, it contributes to achieving the goals of Vision 2030 by increasing the homeownership rate to 70% by the end of 2030. He also mentioned that work is underway to launch a package of guarantee products that provide protection for beneficiaries and financiers, doubling the ability to finance more target segments.

Radwan noted that the company came at an important time to enhance the completeness of the real estate system, given the absence of specialized companies providing guarantees in the past period. He pointed out the benefits of using guarantees to reduce financing gaps, enhance confidence in the real estate financing sector by providing protection for lenders from banks and financial institutions, which raises the demand for real estate financing, and fosters innovation in providing financing products. This, in turn, stimulates increased investment opportunities related to better quality of life and attracts domestic and foreign investment to the real estate sector.

He affirmed their ongoing efforts to develop the real estate financing market and provide guarantees to financial institutions to achieve further growth and enable Saudi families to own suitable housing, especially in light of the challenges of rising interest rates, the limited supply of ready housing units, and rising real estate prices that make homeownership more difficult regardless of subsidies and guarantees. Additionally, some financiers are inclined to finance high-income individuals and small and medium-sized companies.