The smallest apartment in Xu's project is around 90 square-meters, and all of the smaller units are equipped with high-end home decorations and amenities.

Desiring a smaller apartment does not necessarily equate with accepting lower standards.

In fact, buyers of smaller apartments usually have quite high demands for amenities. Air purifiers, water filters, temperature and humidity controls are must-haves for these well-decorate apartments, said Xu.

Analysts said that the strong demand for smaller apartments is driven by greater requirements from young residents, as well as a shift in land supplies in the city.

"Younger residents in Shanghai are becoming more like those in New York and Hong Kong who spend most of time outside working, meeting people, dining out and entertaining, thus they require smaller space at home. Limited supply in primary areas has also inspired developers to look at the opportunities smaller-sized unit offers amid the growing demand at the high end of the market," said James McDonald, head of China Research at property services provider Savills.

Buyers of smaller apartments, who typically have a nuclear family or even no children, quite often demand modern interiors, a decent housing management system and high-end domestic electric appliances, said Tong Yu, a sales manager with Huanyu Realty Services Co.

"In the past most luxury apartments were just cement shells or "naked homes" lacking any decoration, flooring or even plumbing. Now every high-end luxury apartment is well-decorated, fully-equipped and sometimes with superior furnishing. Some maintenance services even include concierge and butler services staffed with overseas-trained employees," said Tong.

Public facilities in high-end residential communities should include a swimming pool, a dining area hosting restaurants, and a garden or a small wood in which children can play.

"High-quality facility management and a presentable public garden in the community adds value to my home," said Lin Yikun, a 28-year-old advertising manager.

Living in a 5-million yuan two-bedroom apartment in city center, Lin said he and his family have more "privacy" than would in a spacious home.

Lin's parents and grandparents live in a two-floor villa in Qingpu district in suburban Shanghai. They share the house with two housekeepers, and sometimes invite relatives and friends to stay over during holidays.

"The villa has too many rooms. One room is idle－the servants put their bicycles in it. But when you consider privacy, there is no private room because so many people share the space under the same roof," said Lin.

In downtown Shanghai, housekeeping can be replaced by part-time appointments. Friends come over for dinner in a restaurant instead of staying in the guestroom over the weekend.

"I think my generation does not require really a big house simply because many needs are met outside home, and many facilities in the city center are extensions of home－reading in a cafe, dining in restaurants, entertainment in theaters and nightclubs. All you need at home is a place to rest," said Lin.