The New Life of Apartments in Dubai's Secondary Market: Bed Spaces, Hostels, and Micro-Apartments Shaping the Real Estate Sector

In recent years, the real estate market in Dubai has experienced an unexpected yet dynamic transformation. As one of the world's leading cities for employment opportunities, Dubai attracts thousands of migrants seeking a better life. However, the high cost of living—especially housing—poses a significant challenge for many. This has led to an increasing demand for more affordable living solutions, driving the rise of shared accommodations like bed spaces and hostels, as well as the repurposing of older apartments.

Historically, the subdivision of homes to create smaller, more affordable living spaces has been a phenomenon largely associated with lower-income populations. But today, it's no longer limited to them. In Dubai, this trend is being seen even among middle-class individuals, particularly in central, previously high-end areas. These spaces, whether bed spaces or subdivided units, offer an affordable alternative for residents who cannot afford to rent an entire apartment but still need to live close to their workplaces.

Adding to the creativity in maximizing available space, many duplex loft-style apartments in Dubai, which feature higher-than-average ceiling heights, are now being restructured to make even better use of vertical space. By incorporating mezzanines, residents have been able to create additional sleeping areas, leaving the lower levels free for storage, closets, or even small study spaces. This inventive use of space helps accommodate more people in a city where housing is at a premium, without compromising on the functionality of the apartment.

This is a trend that mirrors similar developments in other major cities around the world. For example, in my hometown of Bogotá, Colombia, developers have been responding to rising property prices by creating micro-apartments as small as 16m2. These tiny living spaces, located in central districts with high real estate prices, have become the only viable option for people who don’t want to endure long daily commutes of several hours between their homes and workplaces.

Dubai, though traditionally seen as a city catering to luxury tourism, is also experiencing a shift in its real estate market that accommodates more budget-conscious visitors. With the growing popularity of bed spaces and hostels, tourists who cannot afford the high-end hotels now have access to more affordable accommodation options. This trend is largely driven by the repurposing of older apartments, which are being transformed into hostels and short-term rentals. Once again, location becomes crucial in a city where public transportation between districts can take up to two hours.

Interestingly, while this phenomenon might seem new, the subdivision of homes has been happening for years, albeit in more hidden, lower-income settings. Today, however, it has expanded to include middle-class residents and is now present in formerly exclusive areas of the city. The shift towards smaller and shared spaces is not only driven by necessity but also by a market that is constantly evolving.

While this transformation may not have been part of the original urban plan, it shows that the real estate market is highly dynamic and adaptable. Cities like Dubai are constantly reinventing themselves to meet the needs of their residents.

Does this phenomenon exist in your city as well? I’d love to hear about similar trends in your local real estate market. Let’s continue the conversation and explore how housing solutions are evolving around the world.