This is a five square meter apartment in the center of Rome. Formerly a porter's closet, it's just been listed for sale at 50,000 Euros. From the Croatian Times:
Described as a "compact bedsit" the property is in one of the city's smartest districts right next to the ancient Pantheon and with Italy's billionaire Prime Minister Silvio Berlusconi as one of your neighbours.
Mind you, all you can see from the one tiny window is an alley, and only after you have climbed up a ladder to get to the sleeping platform and then crawled across the bed to get there.
Downstairs is a standing-room only bathroom with a shower, sink and a loo behind a folding door.
"Flat rate for world's smallest apartment
" (via Fortean Times)
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