Saudi Arabia: Real Estate Deals for Small Residential Units Increased by 151%

A building offering small housing units in Riyadh. (Dar Al Arkan Real Estate)
A building offering small housing units in Riyadh. (Dar Al Arkan Real Estate)
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Saudi Arabia: Real Estate Deals for Small Residential Units Increased by 151%

A building offering small housing units in Riyadh. (Dar Al Arkan Real Estate)
A building offering small housing units in Riyadh. (Dar Al Arkan Real Estate)

The Saudi real estate market has recently seen an increased demand for small residential units, ranging in size from 30 to 65 square meters, with real estate transactions for these units surging by 151% during the first three quarters of 2024 compared to the same period last year.

In comments to Asharq Al-Awsat, real estate experts and specialists attributed this trend to four main factors. They pointed out that the future in major cities like Riyadh, Makkah, Madinah, Jeddah, and al-Dammam lies in small residential units, which will create new investment opportunities for developers, allowing them to expand their portfolios.

Real estate expert and appraiser Engineer Ahmed Al-Faqih stated that the future in major cities is for small apartments with an average size of 35 square meters. He added that most sales by developers and marketers in large cities are concentrated in small units, consisting of one or two rooms and studios.

Al-Faqih attributed this shift to four main reasons: changes in the demographic structure of major cities, especially Riyadh and Jeddah, due to large-scale migration, improved quality of life, and increased job opportunities.

These households tend to be smaller, with an average of three members. Additionally, new social groups are emerging, including women (either divorced or working women from outside the cities) and men who prefer independent living.

The third reason is a shift in social habits, with newlyweds and young families opting for fewer children and often waiting more than three years to have their first child, after achieving financial and housing stability.

The fourth factor is the rising cost of housing in major cities, leading smaller families and individuals to prefer smaller units, he explained.

Al-Faqih supported his points with data, indicating that real estate transactions for units sized between 30 and 65 square meters doubled, with the number of transactions rising from 242 units in the first three quarters of 2023 to 608 units during the same period this year, signaling a strong preference for this type of housing.

Real estate advisor and expert Al-Aboudi bin Abdullah described small residential units as a “rising star” in the Saudi real estate market.

In an interview with Asharq Al-Awsat, he said these units have successfully attracted both developers and investors, offering an innovative and intelligent solution to the growing demand for housing. This trend aligns with the dynamic transformations in the Saudi real estate market and combines flexibility, efficiency, and sustainability.

Abdullah emphasized the need for diverse housing options driven by social and economic shifts in the Kingdom. He noted that younger generations of Saudis increasingly prefer independent, flexible living arrangements that meet their individual needs at prices suited to their purchasing power.

Abdullah also pointed out that population growth and the increasing influx of employees from international companies and investors have significantly boosted demand for small units in key cities like Riyadh, Jeddah and al-Dammam.

Demand for such units is expected to continue rising, which will reduce pressure on larger housing units and open up new investment opportunities in the real estate sector, he noted.



Gold Slips on Inflation Concerns as High Oil Prices and Stronger Dollar Weigh

An image made with a drone shows oil gas and fuel storage units at the Navigator Terminal in Grays, Britain, 14 April 2026. EPA/NEIL HALL
An image made with a drone shows oil gas and fuel storage units at the Navigator Terminal in Grays, Britain, 14 April 2026. EPA/NEIL HALL
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Gold Slips on Inflation Concerns as High Oil Prices and Stronger Dollar Weigh

An image made with a drone shows oil gas and fuel storage units at the Navigator Terminal in Grays, Britain, 14 April 2026. EPA/NEIL HALL
An image made with a drone shows oil gas and fuel storage units at the Navigator Terminal in Grays, Britain, 14 April 2026. EPA/NEIL HALL

Gold prices fell on Thursday, pressured by a stronger dollar and elevated oil prices that stoked inflation worries, as investors tried to assess the conflict direction from stalled US-Iran talks.

Spot gold was down 0.9% at $4,696.71 per ounce, as of 1135 GMT. US gold futures for June delivery fell 0.8% to $4,714.0.

The dollar inched higher, making greenback-priced bullion more expensive for holders of other currencies, while benchmark 10-year US Treasury yields rose to an over one-week high, raising the opportunity cost of holding non-yielding bullion.

"Gold continues to take its cues from the oil market, with rising energy costs keeping the risk of near-term dollar strength and elevated inflation in focus," said Ole Hansen, head of commodity strategy at Saxo Bank.

Iran seized two ships in the Strait of Hormuz as it tightened its grip on the strategic waterway after US President Donald Trump announced he was indefinitely calling off attacks, with no sign of peace talks restarting.

Iranian officials did not say they had agreed to any extension of the truce, accusing Washington of violating it by maintaining a blockade on Iranian trade by sea.

Brent crude oil prices rose above $100 a barrel on the stalled peace talks and as both nations maintained their restrictions on the flow of trade through the strait.

Higher crude oil prices can add to inflationary pressures, increasing the likelihood that interest rates remain elevated. While gold is often seen as an inflation hedge, higher rates dampen bullion’s appeal as it offers no yield.

Meanwhile, a Reuters poll of economists showed the US Federal Reserve will likely wait at least six months before cutting interest rates this year as war-driven energy shocks reignite already-elevated inflation.

"The current consolidation appears more a pause driven by rate uncertainty than a structural shift, and we maintain the view that gold is likely to reach a fresh record high later this year or in early 2027," Hansen added.

Spot silver fell 3.9% to $74.63 per ounce, while platinum lost 3.2% to $2,007.98, a more than one-week low for both metals. Palladium was down 4.8% at $1,470.79, a more than two-week low.


UK Budget Deficit for 2025/26 Narrows to Six-year Low

Skyscrapers in London's financial district (Reuters)
Skyscrapers in London's financial district (Reuters)
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UK Budget Deficit for 2025/26 Narrows to Six-year Low

Skyscrapers in London's financial district (Reuters)
Skyscrapers in London's financial district (Reuters)

Britain's budget deficit for the last financial year narrowed to a six-year low as a percentage of economic output although borrowing for March alone exceeded forecasts, official data showed on Thursday.

The Office for National Statistics reported 132.0 billion pounds ($178.1 billion) of public sector net borrowing in the 2025/26 financial year that ⁠ended in March.

That ⁠was 0.7 billion pounds less than the most recent forecast from the Office for Budget Responsibility and down from 151.9 billion pounds in 2024/25.

Equivalent to 4.3% of ⁠economic output - in line with the OBR prediction - the deficit was the smallest since the 2019/20 financial year, which ended just as the response to the COVID-19 pandemic caused debt to soar.

Debt interest spending in 2025/26 was 97.6 billion pounds, up from 85.4 billion pounds a year ⁠previously ⁠and marking the second-highest figure in cash terms since 2022/23, when inflation soared after Russia's invasion of Ukraine.

Last week, the International Monetary Fund cut Britain's economic growth forecasts for 2026 by more than for any other Group of Seven nation due to the country's exposure to higher energy prices with its heavy use of natural gas.

"A more stagflationary backdrop is forecast to take shape, with speculation already building about the impact of weaker growth on the Chancellor's headroom," Nabil Taleb, economist at PwC UK, said, referring to Reeves' ability to meet her borrowing target.

"Recent moves in bond markets, with gilt yields briefly touching 5% for the first time since 2008 before easing, also highlight the UK's vulnerability to uncertainty."

In March alone, the ONS reported public sector net borrowing of 12.6 billion pounds. Economists polled by Reuters had a median forecast of a 10.3 billion-pound deficit for the month.


Saudi Arabia, Philippines to Join JPMorgan Emerging Market Bond Index in 2027

FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo
FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo
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Saudi Arabia, Philippines to Join JPMorgan Emerging Market Bond Index in 2027

FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo
FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo

J.P. Morgan said on Wednesday that Saudi Arabia and the Philippines will be added to its local currency emerging market debt index from January 29 next year.

The inclusion will cover Saudi riyal-denominated sovereign sukuk and Philippine peso-denominated government bonds, both entering the widely tracked GBI-EM ⁠index series.

Their weights ⁠will be introduced gradually, with Saudi Arabia expected to reach 2.52% and the Philippines 1.78% once fully phased in.

The update is part ⁠of a broader index adjustment, which will lower the "Country Cap" - the maximum weight, or share, any single country can hold in the "diversified" index - to 9% from 10%.

As a result, major markets including China, India, Mexico, Malaysia, and Indonesia will see their ⁠weight ⁠reduced to the new limit.

Based on current eligibility criteria, about eight Saudi sovereign sukuk with a combined value of roughly $69 billion could be included, JPMorgan said.

For the Philippines, nine eligible government bonds with a combined value of around $49 billion are under consideration.