Rising demand for chic living - in a subdivided flat
Despite their reputation for being dirty, dangerous and overcrowded, subdivided flats are growing in popularity, according to a property agent who has found a ready market in the city for his Japanese-style units.
'Half of the tenants of subdivided flats are young adults who want to save money for private flats and cut their transportation costs,' said property agent Daniel Lee Chin-fung, the founder of www.hkjoe.com, which offers attractively designed subdivided flats for rent.
Lee said the availability of these partitioned flats - in Sham Shui Po and Cheung Sha Wan - had fallen sharply in recent months, from about 30 to just a handful. 'Joe' sounds like the Cantonese word for rent.
'Demand is rising rapidly but owners have withheld some of their flats from the market after the government stepped up action' on subdivided flats because of safety issues, he said. Thousands of tenants living in these tiny flats could be forced to find new homes after last week's fire in Fa Yuen Street, Mong Kok, in which nine people were killed.
The Buildings Department is about to issue removal orders to owners of affected buildings, particularly those who blocked staircases when dividing flats to increase their rentals. It will also inspect more than 300 buildings all over the city with similar problems in the next six months.
The crackdown is expected to make the shortages more severe and push up rentals, which have risen by 20 to 30 per cent in recent months - up from levels of HK$2,500 to over HK$5,000, according to Lee.
A new group of prospective tenants was also looking for 'something nicer', and was willing to pay for more upmarket subdivided flats. 'They're usually aged around 30,' he said. 'They come from diverse backgrounds - graduates of high school, university, and even managers.'
Videos posted on Lee's website show flats of about 150 sq ft to 230 sq ft, with wooden tiling on the floors. Dubbed Japanese houses, they are divided into a bedroom and living room by a semi-transparent screen, and have an 'open kitchen' with sink and rangehood.
By giving the flats a Japanese touch, owners can ask for monthly rentals of HK$3,600 to HK$5,000 - compared with those involving minimal renovation, which are rented out for around HK$2,000. Interested tenants can leave a message on the website stating their preferences, including budget and flat size.
The city's home-purchase affordability ratio - that of mortgage payment to median income of households - rose to 47 per cent in the second quarter, approaching the long-term average of 51 per cent from 1990 to 2009. Rentals for flats smaller than 400 sq ft have also jumped by 55 per cent in the last five years.
In the face of public concern, Lee said it was difficult to reject owners commissioning his company to let units that may have fire risks. 'It is a dilemma we are facing. There is demand for these flats but I'm also worried about tenants' safety,' Lee said. 'I often advise them to use electric stoves instead of gas ones.'
Poon Wing-cheung, a real estate professor at City University, said the city's limited upward mobility had given rise to a new social class, whose members have completed tertiary education but are on low salaries.
'They can't afford private flats but at the same time do not qualify for public housing; they are a group being neglected by our housing policy,' Poon said.
He foresees a demand for more public housing. 'The government may lower the application threshold for these singletons and set a comparatively higher rental for them.'