Dubai homes are getting smaller while property prices increase

Developers are delivering more compact newbuilds, but that keeps homes affordable, say real estate agents

Dubai's population is forecast to reach five million by 2030, and the housing market is responding as a result. In 2024, there is a record divergence between home sizes and property prices.

Data from consulting group ValuStrat, using Dubai Land Department figures, reveals that the average home size is down to 1,450 square feet, while the average price per square foot is steadily increasing to Dh1,490 ($405) – its highest yet.

This trend reflects a growing demand for affordability amid the increased property prices. Developers, facing rising land and construction costs, are opting for smaller, more compact homes. As a result, buyers are opting for properties in prime areas, which has also driven this shift.

Several factors contribute to this trend, including Dubai’s net-zero by 2050 ambitions, which have led to a push for energy-efficient, cost-effective housing. The UAE’s rapid population growth, particularly after the coronavirus pandemic in 2020, has also increased demand for affordable homes, with more than 100,000 more residents arriving in 2023 alone.

“Developers like Damac and Emaar recognised that many potential buyers wanted to live in prime areas but couldn’t afford larger units,” said Wassim Abdallah, head of off-plan at Betterhomes. “Instead of lowering prices, they reduced the size of the units, creating a more affordable entry point.”

In 2021, the average home size was 2,087 square feet, but since then, there has been a clear trend towards smaller units, as prices per square foot continue to rise.

A recent report by Betterhomes revealed that long-term residency in Dubai is on the rise, with 89 per cent those surveyed planning to stay in the city for more than five years and 66 per cent intending to remain for more than a decade. This trend is driving developers to focus on functionality and affordability rather than space, it said.

In 2024, the average home is more than 600 square feet smaller than it was three years ago, a striking reflection of how the market is adapting to increasing costs and rising demand.

Dubai’s shift towards smaller homes is common among cities facing similar affordability challenges.

“In the end, a three-bedroom house is still a three-bedroom house, even if the rooms are smaller than before,” said Mario Volpi, real estate veteran and head of brokerage at Novvi Properties. “So, the strategy of building smaller houses seems to work. After all, it is up to the buyer what they wish to do with the space,” he said.

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