Hong Kong housing is widely known to be among the most expensive in the world. Less well known is that it is possible to buy a small flat for just HK$500,000 - though not without taking some risks. In per square foot terms, that is even cheaper than a unit in neighbouring Shenzhen on the mainland, and agents said that, with a little research, first-time home seekers armed with a budget of just half a million dollars might find a tiny home. The most likely targets in that price range will be units on offer in sub-divided village houses more than 10 years old in locations such as Yuen Long, Tin Shui Wai and Lantau Island, some of which even come with rooftop access. 'The small lump sum involved is not only attracting end-users but also investors betting on upside potential in the event of a market boom,' said John Mo, a sales manager at Skyworld Realty Consultant, which focuses on broking village houses. But a lawyer warns that buyers on a sub-HK$500,000 budget may find that the 'cheap' home they are being offered may not be legal. A case in point is a 175 sq ft unit with a 175 sq ft roof top at 18-year-old Tian Li Garden in Tai Tong, Yuen Long, being offered by Mo's agency at about a third below market value. The HK$330,000 asking price represented about HK$1,885 per sq ft for the flat alone, excluding the rooftop, less than Shenzhen's average of 2,000 yuan (HK$2,272) per square foot. On further inquiry, the South China Morning Post found there was an illegal structure on the rooftop. After being challenged by the Post to say whether a buyer would be provided with secure title, another Skyworld agent, surnamed Tang, said the title deeds were missing and that illegal structures were 'quite common' in the area. 'This is a special case, and the unit is about one-third below market value as the deed was lost in a fire during the second world war,' said Tang. 'It means the owner has no ownership title to the flat.' Angela Lee, a partner in the law firm Baker & McKenzie, warned that home seekers should never buy a unit without securing title to it. 'Your money will be unprotected,' she warned. However, for those small units that do come with a secure title, low prices and limited supply mean they are snapped up quickly once they come on to the market, and every month about 10 such deals are done, according to Mo. He said buyers came from Kowloon or Hong Kong Island, where they said prices were too high. Simon Pang, director of Must Rich Property, which also concentrates on the Yuen Long, Sheung Shui and Tuen Mun markets, said small units in the area were in demand because, although they were in a remote location, they were inexpensive. 'After paying for the flat, buyers can still afford to pay for a car to travel between their home and office. Therefore they do not mind the remote location,' said Pang. Most buyers were either newly married young couples or retirees, he said. Retirees had generally sold their properties in Kowloon or on Hong Kong Island for above HK$2 million and were moving into smaller flats as a way to save expenses. They paid cash, while newlywed couples had saved just enough for a down payment for a mini-sized flat. Pang said one of his clients bought a 350 sq ft flat in Kam Sheung Road, Kam Tin, for HK$300,000 five years ago and was now considering reselling the flat for HK$500,000. While he still had four such flats for sale on his books, including a 350 sq ft unit in Tin Shui Wai for HK$300,000, there were fewer such sub-HK$500,000 mini-flats coming to the market recently, because of the strong rise in property prices last year. Mo said most buyers paid about half the price of a flat in cash and financed the balance with a personal loan, since banks were often reluctant to provide a mortgage on such a low outstanding amount. Other agents said it was more likely that mortgage loans were not available because of missing title deeds.