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.
