Multifamily vs. Studio: Find Out Which Is the Better Rental Option in São Paulo, According to Analysts

• Read: Have you heard about multifamily?

Just in 2024, the state saw around 865 new units across five towers. For 2025, São Paulo is expected to grow in the Multifamily market, with an estimated 1.9 thousand new units, approximately 96,000 m².

• Learn more: Brazil’s Multifamily Market Set for 31.5% Growth in 12 Months; SiiLA Reports Over 9,000 Units Monitored Nationwide

At the same time, Multifamily faces competition from Studio apartments, compact properties with integrated spaces. High-end construction companies have been betting on this segment, with refined projects in prime locations. This shows that the profile of buyers is shifting, with many opting for smaller spaces due to the high cost of living and the need for more efficient use of space.

The new Master Plan for the city and the Minha Casa Minha Vida program, for instance, have intensified the demand for these types of properties, now with a ceiling of R$ 350,000, especially near subway stations and bus corridors.

• Learn more: São Paulo City Master Plan: Understanding the main proposed changes and what we know so far

According to data from SECOVI's 2023 annual report, São Paulo state has approximately 367,400 units of up to 45 m² launched, representing 45% of the total 818,000 properties. From January to July 2023, this category accounted for 81.6% of launches, a historical record.

Of the 73.2 thousand units launched in São Paulo in 2023, 42.3 thousand have areas between 30 m² and 45 m², representing 58% of the total. The share of compact properties saw a slight reduction this year. Units smaller than 30 m² accounted for 17% (12.7 thousand) of the total volume launched in the capital.

However, it’s difficult to categorize what is “affordable” or not. According to SECOVI’s research, although studios are narrower and may seem cheaper than larger properties, the economic classification of a property (average price) is not always sufficient. The price-to-area ratio for studios can sometimes make them not fit into the affordable category.

With this growth, questions arise for those interested in investing in this segment. On one hand, there's something new and rapidly developing in the market; on the other hand, we see the growth of a type of property that has existed for decades.

Alexandre Frankel, founder and chairman of Vitacon S.A and CEO & Founder of Housi, explains that he sees the growth of studios, particularly in major urban centers, as a result of societal shifts, especially among younger generations.

“The increase in property prices leads people to look for more affordable alternatives to maintain their quality of life, and the Multifamily model is a solution. The rental model offers flexible options such as short- or long-term leases, providing more financial flexibility for residents and lower transportation and gas costs, as the location typically favors residents in this respect,” explains Frankel.

For him, Multifamily apartments are the future of housing, especially since they adapt well to the current economic scenario, where the cost of acquiring properties is high, and access to credit is more limited. For investors, the advantage is having a recurring income through rent with the possibility of centralized and optimized management.

• Read also: Companies Double Down on Brazil, Converting Commercial Buildings into Multifamily Residential Properties