The newest trend in Brazil’s housing market? Go tiny

As one of the most affected activities during the economic recession, Brazil’s construction sector had to reinvent itself in order to survive: cutting costs, changing forms of land banking, launching fewer new real estate developments—but, above all, looking out for new opportunities. This time, hope lingers in the tiniest of spaces: the market of compact apartments.  

In the world’s largest cities, such as New York City and Tokyo, studio apartments have been a reality for decades. In São Paulo, Brazil’s biggest construction market, apartments smaller than 45 square meters are now leading sales in every aspect, according to Secovi, the trade union for the construction sector. While two-bedroom apartments remain the flagship model, increasingly small apartments have been popping up all over the city, especially near subway stations and other transportation hubs.

According to CBIC, the Brazilian construction industry chamber, one-room apartments already make up 9.4 percent of the total properties on offer in the Southeast region, which includes the city of São Paulo. In the country’s South, they already make up 15.1 percent—the largest share...