Nano flats and small apartments will be the new norm in Hong Kong.
Property developers in Hong Kong are building more nano flats to cater to the strong demand for such units in the world’s most expensive housing market, reported the South China Morning Post.
According to JLL’s latest research, at least 2,100 homes with saleable areas of under 200 sq ft, are expected to be completed there between 2017 and 2020. This works out to an average of 510 units a year compared to just 151 units per annum between 2014 and 2016.
Most are situated in the New Territories, far from the primary business districts.
Aside from that, some are even smaller than a typical 134 sq ft parking space in the city with starting sizes of 128 sq ft, as there are no rules on the minimum flat size in Hong Kong.
Despite the cramped space, there is a strong demand for such tiny flats, which have lower overall cost but higher psf price.
JLL’s regional director of capital markets Henry Mok revealed that most first-time buyers would rather purchase nano flats even though they can afford homes costing below HK$6 million (S$1.05 million).
[Because] that budget would only allow them to buy a sizeable flat in an old housing estate (over 30-years-old) in urban areas, given prices have reached record highs.”
Earlier this month, Hong Kong’s Chief Executive Carrie Lam Cheng Yuet-ngo announced a new “Starter Homes” scheme that will sell units at below-market prices to first-time buyers.
While this is expected to have a slight impact on the sales of nano flats, real estate agents are optimistic that take-up would remain healthy at least in the next few years.
“Given the supply of Starter Homes will take time to realise, buyers with a pressing need for a home may still opt for the private residential market,” noted JLL associate research director Ingrid Cheh.
Moving forward, the property consultancy thinks that residential prices in Hong Kong will continue to increase due to robust demand.
This article was edited by Keshia Faculin.
