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Real Estate and DevelopmentShaken but not stirredThe Saudi real estate sector, although shaken by the current global meltdown, continues togrow steadily, benefiting from growing demand for residential and commercial properties. Risingpopulation, changing demographics, growing hotel and tourism industry and higher personaldisposable income are fuelling demand in the Kingdom’s residential markets.KSA’s real estate sector drivenby strong structuralfundamentalsSize of the average household is changing: There is a gradual trend toward the Westernfamily life style of smaller (nuclear) family units. This is one of the by-products of urbanmigration. Furthermore, the young population would marry and form new households. Thecurrent average household size in KSA is estimated to be 5.62. We estimate the total householdsize to decline to 5.2 by 2015. While we expect the expat non-Saudi household size to remainconstant at 4.1, the household size of Saudi families would decline from approximately 6 atpresent to 5.8 by 2015. We have taken into consideration the varying household sizes for eachregion while estimating expected changes for each region.Exhibit 136: Large variance in regional household size9876Size of household543210MadinahJoufArarHailJazanEasternProvinceQassimNajranAseerBahaTabukRiyadhMakkahOverall Saudi Non-SaudiSource: KSA Department of Statistics, NCBC ResearchWe are of the view that a declining household size will fuel demand for housing, creatingdemand for a large number of household units. Simultaneously the lower average householdsize and an improved affordability will also accelerate growth within the apartment segment.JUNE 2009SAUDI ARABIA FACTBOOK87