Will we live in a small house?

I remember when the recession hit in mid 90's, developers started to reduce house sizes and specifications. Some even offered cement render floor finishes except to kitchen and bath that came with tiles due to building by-laws requirements. And it was fast selling.

Can that be done in Saudi Arabia when house demand is critical and majority looking for affordable homes. When suppliers and contractors are still offering building construction works at high cost, developers have no choice but to increase price. On the other hand, would home buyers be offered only with apartments to purchase or to rent as an alternative to villas / detached homes. Will they opt out for smaller villa particularly by young, small family couples? The floor area for the villa in the picture is about 300 square meters and I mean smaller than this. Will they also choose some other type of housing other than apartment? I don't know.

In US, developers have began to offer smaller homes for sale during this current economic recession and it works http://bit.ly/bdYweT

Of course, it is a different market, different market behaviour. Or is it supply dictates demand or otherwise in Saudi Arabia. Studies still required?