The property boom in Hong Kong has spread to public housing, with a 126 sq m housing unit at the Fung Tak Estate in Kowloon district sold for a record price of HK$1.95 million early last month, reported Bloomberg citing Full Mark Property Agency.
This comes as the rental yield for small public housing units can reach four percent or more. In fact, the average rental yield for such units is 2.8 percent, revealed the Rating and Valuation Department.
Data from Centaline Property Agency showed that the per square foot (psf) price of HK$15,476 for the Fung Tak Estate unit surpassed that of some private houses within the district – a unit at private development Lions Rise was sold for HK$14,638 psf recently.
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“Small single flats for rent are rare and popular in the area, they usually get rented out within a month after the transactions are done,” said Full Mark Property Agency branch manager Kim Chan.
Nonetheless, public housing units are not the only properties shattering records in Hong Kong’s gravity-defying market. In May, a carpark in Central fetched HK$3 billion, and a waterfront residential site was sold for HK$2.2 billion in February, while the city’s gauge of home prices hit a record high earlier this month.
Hong Kong’s public housing flats are a holdover from a programme that used to allow tenants to acquire the units they were renting at subsidized prices. But while the homeowner who had purchased apartments under the discontinued Tenants Purchase Scheme are allowed to resell their units in the open market, they are required to pay a premium to the government.
This article was edited by Denise Djong.