Why Hong Kong’s micro-flat trend points to bad property deals
Amid the housing affordability crisis in Hong Kong, a new trend has emerged among private developers: micro flats or “nano flats”. Less than 250 sq ft in area and equipped with the basic amenities, these flats are supposedly an affordable option for young and first-time buyers.
However, nano flats cost more per square foot than larger homes. For example, a 209 sq ft flat in Pok Fu Lam sold for around HK$38,000 per square foot, when the average price for a flat in the same area is around HK$16,700 per square foot. Therefore, although the overall cost of a nano flat is lower than a typical flat due to its size, it is more expensive per square foot.
Additionally, micro flats can be an inefficient use of space and resources. These flats can at most house two people, and typically include a small kitchen, a bed, a wardrobe, a bathroom and some space for a television set. Making larger flats with similar amenities can house more people who can share these amenities, thus utilising space and resources more efficiently.
So, what else can the government do to address the housing crisis?
First, it should impose a limit on the size of flats built by private developers. When the trend started, nano flats were generally 200 to 250 sq ft in size. Now, they are smaller than a standard parking space, which are typically 134 sq ft. At the same time, the cost of these flats is soaring. Putting a limit on the minimum size of flats will help to mitigate this problem.
Second, the government should promote the development of working professionals’ hostels. These are essentially dorms catering to young professionals and are located near business districts. Residents have the choice of living in private or shared units, while having access to communal facilities such as kitchens and recreational spaces. It is more affordable than renting flats and allows for a more flexible lifestyle.
It is crucial for Hong Kong to find a way to solve its housing affordability crisis and make it easier for citizens to enter the housing market. However, the solution does not lie with micro flats. These flats are becoming more expensive while shrinking in size. If this continues, this “solution” will also become inaccessible to its target group.
Sree Manasvini, Arizona