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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)
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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.

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Business

Gold Slips Over 2% as Dollar Holds Firm on Fed Rate-hike Expectations

British gold bars and sovereign coins on display in a London shop. (Reuters)
British gold bars and sovereign coins on display in a London shop. (Reuters)
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Gold Slips Over 2% as Dollar Holds Firm on Fed Rate-hike Expectations

British gold bars and sovereign coins on display in a London shop. (Reuters)
British gold bars and sovereign coins on display in a London shop. (Reuters)

Gold prices fell more than 2% on Tuesday, pressured by a firmer US dollar on expectations of Federal Reserve interest rate hikes this year, while investors assessed US-Iran peace talks.

Stocks across the globe declined amid concerns over AI-related share valuations and as higher interest rates loomed. Crude fell 1% while the dollar held near a one-year high, making gold less affordable for buyers holding other currencies.

Spot gold was down 2.2% at $4,099.84 ⁠per ounce, as ⁠of 0753 GMT. US gold futures for August delivery fell 2% to $4,117.70, Reuters reported.

Spot silver slumped 5% to $61.90 per ounce, platinum lost 3% to $1,628.55, and palladium was down 2.9% at $1,229.28.

"Gold had received some relief from lower oil prices this week, but it is getting no such favors from the US dollar, which continues to push higher ⁠on expectations of Fed rate hikes," said Tim Waterer, chief market analyst at KCM Trade.

Traders now see an 88% chance of a rate hike in December, up from 61% before the Fed meeting last week, according to the CME FedWatch Tool, as investors price in hawkish monetary policy under new Chair Kevin Warsh.

Chicago Fed President Austan Goolsbee said that with the labor market stable, he is focused on figuring out whether too-high inflation will stay that way or recede, as the effects of high tariffs ⁠fade, and ⁠if the conflict in the Middle East gets resolved.

The US has waived sanctions on Iran for 60 days after the first talks under a nascent peace deal, while officials reported a sustained lull in fighting in Lebanon under the agreement aimed at ending hostilities across the region.

US Vice President JD Vance said talks with Iranian officials in Switzerland had laid a good foundation for a final peace deal, although Iran denied that it had begun discussions of its nuclear program.

Investors await US Personal Consumption Expenditures data, the Fed's preferred inflation gauge, due on Thursday, for further cues on monetary policy.

Business

EU Bets on Digital Euro to Cut US Tech Addiction

Euro banknotes, Visa and Mastercard cards are placed on a keyboard in this illustration taken September 24, 2025. (Reuters)
Euro banknotes, Visa and Mastercard cards are placed on a keyboard in this illustration taken September 24, 2025. (Reuters)
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EU Bets on Digital Euro to Cut US Tech Addiction

Euro banknotes, Visa and Mastercard cards are placed on a keyboard in this illustration taken September 24, 2025. (Reuters)
Euro banknotes, Visa and Mastercard cards are placed on a keyboard in this illustration taken September 24, 2025. (Reuters)

The EU believes a digital euro is the answer to cutting its addiction to US payment systems, like Visa and Mastercard, as well as Apple Pay and Google Pay, as the bloc seeks to favor European firms over others.

Brussels hopes it could provide an alternative local option for any payments in shops or online since people could easily pay, just like other systems, using a card, an app or via their banking app.

The European Union will move one step closer on Tuesday to creating a digital euro when EU lawmakers hold a long-awaited vote on the virtual currency.

The European Central Bank first suggested the digital euro in 2020 because Europe lacked its own system before the EU executive made its formal proposal.

The digital euro cannot be created without the rules underpinning the project being approved by the EU capitals and the European Parliament.

What is the digital euro?

Don't confuse it with your cash in the bank. When you use your bank card, Apple or Google Pay, you pay with physical money that exists in your account.

Instead, your digital euros would be in a separate virtual wallet.

The ECB hopes the digital euro will be available to citizens in 2029 if the EU negotiators greenlight the rules by the end of the year.

If that timeline sticks, the ECB is ready to launch a pilot program in mid-2027 to test how it would work in practice.

Some say that is too long, but "banks and merchants need time to prepare so they can roll it out smoothly and at scale", Alessandro Giovannini, advisor to the digital euro director at the ECB told AFP.

How will it work?

Digital euros will have the same value as cash and banknotes.

Any user would need to create an account with a bank or a public institution, like a post office, and transfer money into it from another account or via a cash deposit.

Users can then pay with digital euros in shops, online and between individuals using different methods, including card, app or phone.

Officials stress the system would protect people's privacy, with no possibility to identify who made transactions, and an offline mode that would be as confidential as using cash.

"It wouldn't replace anything. Cash would still be available, and people could use existing private payment methods," the ECB's Giovannini said.

The digital euro would give more choice and let consumers "preserve their freedom to choose how to pay as daily life becomes more digital", he added.

Why does the EU want a digital euro?

Payment systems are "not neutral" but "instruments of power", centrist EU lawmaker Gilles Boyer said in a statement.

"We, Europeans, have had many wake-up calls about our dependence on the US. We're fully awake now, but we're not always acting," he said, adding Tuesday's vote would make "a sovereign, pan-European payment solution a reality".

EU officials often point to Washington's 2025 sanctions against International Criminal Court judges to illustrate the grip of US firms. French judge Nicolas Guillou has described how he lost access to his Visa card.

The digital euro is "a chance to end a dependence we have lived with for too long".

According to the ECB, nearly two-thirds of card payments in the euro area are handled by non-European companies -- mostly Visa and Mastercard.

And 13 out of 21 eurozone countries have no national card scheme for day-to-day payments in shops or online stores.

Who doesn't want it?

Banks. The main reason for their reticence is the cost.

Adapting the banking system to the digital euro will cost 18 billion euros ($20 billion), a report in April by the European Banking Federation said.

But the ECB insists it will cost the banking sector between four and 5.8 billion euros in investment costs.

Banks also fear the effects on their financial stability because if customers convert their money into digital euros, bank deposits would plummet.

The ECB says there is no risk.

"Thanks to its design that prevents large deposit outflows, the digital euro wouldn't cause these risks -- even in extreme and unlikely crisis situations," Giovannini said.

European banks also fear reduced demand for their online services and worry the digital euro is a rival to the pan-European payment system Wero.

Business

Oil Falls 1% as Investors Focus on Hormuz Flows after Peace Talks

FILE PHOTO: Storage tanks and oil refineries in Jurong Island, Singapore, March 24, 2026. REUTERS/Edgar Su/File Photo
FILE PHOTO: Storage tanks and oil refineries in Jurong Island, Singapore, March 24, 2026. REUTERS/Edgar Su/File Photo
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Oil Falls 1% as Investors Focus on Hormuz Flows after Peace Talks

FILE PHOTO: Storage tanks and oil refineries in Jurong Island, Singapore, March 24, 2026. REUTERS/Edgar Su/File Photo
FILE PHOTO: Storage tanks and oil refineries in Jurong Island, Singapore, March 24, 2026. REUTERS/Edgar Su/File Photo

Oil prices fell more than 1% on Tuesday, extending losses from the previous session, on signs of some progress in restoring crude flows through the Strait of Hormuz following US-Iran peace talks.

Brent crude futures fell $1.09, or 1.4%, to $76.81 a barrel and US West Texas Intermediate declined to $72.99 a barrel, down 87 cents, or 1.2%, as of 0607 GMT.

Prices fell more than 3% on Monday after the United States granted Iran a 60-day sanctions waiver following initial peace talks, and as officials reported a ‌lull in hostilities ‌in Lebanon under the broader agreement, Reuters said.

"The gradual increase ‌in ⁠oil flows through ⁠the Strait of Hormuz continues to weigh on the market," said ING analysts in a note.

Two crude tankers with just under 2 million barrels of oil sailed through the Strait of Hormuz on Monday, ship-tracking data showed, in a sign that traffic was picking up following weaker flows on Sunday due to concerns over passage through ⁠the waterway.

"Transits over recent days look to have ‌risen sharply, (which) the market will ‌treat as a proxy for both physical oil, perhaps paper oil, and diplomatic ‌progress," said Sparta Commodities' head of research Neil Crosby in ‌a note. "It feels like we will be stuck in this bearish risk-off/optimistic mood until such time as something changes."

The price declines come after a weekend that had appeared to put the week-old accord in jeopardy, including ‌threats from US President Donald Trump to restart the war if Iran disrupted shipping through the Strait ⁠of Hormuz ⁠after Tehran declared the strategic waterway closed.

"There remains a prevailing dose of market skepticism, rooted in deep-seated mistrust between Washington and Tehran, suggesting that any return to pre-war oil prices is likely to be delayed rather than immediate," said Tim Waterer, chief market analyst at KCM Trade.

Separately, analysts in a Reuters poll expect US crude inventories to have fallen last week, along with distillate and gasoline inventories.

On Monday, government data showed US crude stocks in the Strategic Petroleum Reserve fell to 331.2 million barrels last week, the lowest since June 1983, as supplies tightened in the wake of the US-Iran conflict.