Dubai is bucking global property market trends, with investors and residents showing a preference for larger living spaces, in contrast to other markets where economic pressures, urbanisation, and an intensifying housing crisis have pushed many to opt for smaller homes and reassess their lifestyle choices, research suggests.
While the trend is rising in popularity even in cities like New York, London and several cities in Russia, Gulf cities such as Dubai and Abu Dhabi are yet to show any such affinities, sector experts said.
Surprisingly, Russian cities overwhelmingly dominate the list of the smallest average apartment sizes globally, as against the long-standing perceptions that thickly populated cities such as Tokyo and Hong Kong could be figuring on top, the latest market research by Realiste, the Dubai-headquartered AI-based global real estate consultancy, revealed.
The Russian city of Adler, located on the Black Sea coast, led the table with an average apartment size of just 39.84 square meters, closely followed by Rostov-on-Don in Southern Russia with average apartment size of 43.69 square meters and St. Petersburg with modest living spaces averaging 45.51 square meters.
Dubai and other rising UAE real estate hotspots such as Abu Dhabi and Ras Al Khaimah, on the other hand, are still seeing surging demand for spacious villas and apartments, with wealthy global investors chasing multi-million, super luxury houses in these cities, industry insiders said.
Reasons for smaller apartments
Skyrocketing real estate prices and increasing urbanisation are cited by Realiste as the major reasons for the rising preferences for smaller apartments.
“The push towards smaller living spaces is often assumed to be in Asia’s high-density urban centres like Hong Kong or Tokyo.
“However, data from our recent research paints a different picture,” Realiste said.
The study said Russia dominates the list of cities with the smallest average apartment sizes globally, revealing a unique facet of its urban housing market.
Realiste’s findings, derived from a sophisticated AI algorithm that evaluates apartments worldwide, said the rising popularity of micro-apartments is due to the fact that they offer an affordable entry point into desirable urban areas.
“In cities like New York and London, micro-apartments have become a viable solution for young professionals and students who prioritise location and affordability over space,” it said.
For instance, in New York City, the average studio apartment size has decreased from 63 square meters in the 1990s to just 47 square meters today.
Similarly, London has seen a rise in “pocket apartments”, typically measuring around 37 square meters, aimed at providing affordable housing in the city’s high-demand areas, the study said.
Non-Russian cities with tiny apartments
While Russian cities dominate the list of cities for smallest size apartments, Realiste said non-Russian cities such as Bali in Indonesia and Seoul in South Korea also feature in the top 10 for smallest average apartment sizes.
While Bali ranked 6th with an average apartment size of 48.51 square meters despite its reputation as a tropical paradise, Seoul figured on the 7th spot, with apartments averaging 49.51 square meters.
“These figures stand in stark contrast to cities traditionally thought to have the smallest apartments.
“For example, Tokyo, often associated with micro-living, averages 54.41 square meters and ranks 15th, while Hong Kong, another city known for its tiny apartments, is 16th with an average size of 54.58 square meters,” the study said.
Dubai’s dominance in global luxury real estate
Industry players and a recent market study, however, showed Dubai’s continued dominance in the global real estate sector, with super-rich global investors of late shifting their focus from prime central London to the Gulf city for acquiring multi-million, spacious and super-luxe residential units.
Dubai’s steady and high-yielding return on investment (RoI) potentials from property investments are cited as the major factors influencing cash-rich buyers to shift their focus to the emirate, besides concerns about the UK’s new Labour government’s tax and spend priorities.
A recent study by UK-based Beauchamp Estates said Dubai’s prime property market is attracting significant investment, surpassing London, in transactions for homes over $10 million.
The study, however, also showed the trend of wealthy buyers opting for smaller, more manageable properties in Dubai, which are ideal for occasional stays.
Industry players said what stands out for Dubai is the extremely competitive per square foot cost and the high tax-free ROI of 6-8 percent on average.
“For investors, Dubai’s combination of affordability and robust returns is unparalleled,” Ghassan Khairallah, Director – Sales at Huspy, the Dubai-based leading real estate consultancy and mortgage firm, told Arabian Business in a recent interview.
Khairallah said with $1 million fetching larger homes in Dubai as compared to London, it is advantageous for the UAE in the near term.
Arabian Business also reported last week about the surging demand for apartment renovations in Dubai, with house owners spending top dollars to make their apartments and villas ‘stand out’ to attract ‘premium’ tenants.
Follow us on
