Are Dubai’s apartments and villas getting smaller in size?
Dubai-based property valuation and advisory consultancy Valustrat recently analysed 150,000 sales transactions, for both off-plan and ready units, spanning an eight-year period (2010-18) that were sourced from the Dubai Land Department. The research focused only on residential apartments and villas, filtering out serviced and hotel apartments as well as any outliers found in the database that could potentially skew the results of the study.
This research has found that while the average size of a home sold in 2010 was 1,578 sq ft, 2018 saw that average shrink 29 per cent to 1,116 sq ft. Villas saw marginal changes in size, from 3,934 sq ft in 2010 to 3,777 sq ft last year. Apartments, on the other hand, reduced in size by 20 per cent, as the average size was 1,207 sq ft in 2010 compared to 962 square feet in 2018.
Demand is unique
“When we delve into the possible reasons why this has happened, we find that it is very much related to demand and supply. Dubai’s demand is unique when compared to other cities around the world, simply because of the demographic mix where a vast majority are international millennials who appear to be more willing to stay in smaller apartments. Various property developers who represent the supply-side, have not only begun to recognise this demand but also sought to offer more affordable homes catering to this demand, at least in terms of the total price and/or payment plans,” says Haider Tuaima, head of real estate research at Valustrat. “Driven by market demand, developers generally maintained their apartment ticket prices during the eight-year period [with exception to 2014] which averaged Dh1.33 million, while average villa ticket size increased from Dh3.3 million in 2010 to Dh4 million in 2018.”
Studying recent floor plans of residential projects with those that were designed eight years ago and beyond confirms the shrinkage phenomenon, confirms Valustrat. For example, many studio apartments have halved in size, now more equivalent to the size of a small hotel room, one-bedroom apartments no longer have separate kitchens, two- and three-bedroom apartments would have open-plan kitchens and with the second/third bedroom being smaller with no en-suite bathrooms.
More practical homes
And in order to provide additional sellable areas, many developers resorted towards ensuring decently sized balconies for every apartment. Having said that, today’s units may be smaller, they may be better designed, better laid out and more practical to live in.
“Eight years ago, the average price per square foot for a home in Dubai was Dh898. Fast forward to 2018 and that average jumped 36 per cent to Dh1,221. And remember, this is the price towards a smaller residential unit as mentioned earlier,’ says Tuaima.
Generally, properties that were built more than a decade ago were more lavish in size, which explains the popularity for tenants of not just the older areas of Dubai, but the northern emirates as well. Assuming, of course, that these older properties are properly managed and are regularly maintained, for which case, they are certainly worth the investment.