Only Beijing can solve Hong Kong’s housing crisis
- The rapid expansion of the market for small and nano flats is a win for both the developers and the government. More tiny flats will keep flooding the market unless the central government actively cracks down
There have been reports that local property bosses were recently tossed into a meeting with the big honchos from the north to tell them to fall in line. This means contributing more to society by helping to resolve the perennial problem of a housing shortage in Hong Kong.
A new study produced by the research office of the Legislative Council makes for fascinating reading about the nano-flat phenomenon. Defined as new flats with a saleable area of less than 215 sq ft, the city saw a 61-fold increase in the completion of such flats from 2010 to 2020. Actually, there were barely any such new flats sold before 2012.
“Small” flats, defined as those as less than 430 sq ft, accounted for up to about 44 per cent of the annual completion of private residential units during the 2018-2020 period. Last year, there were 8,400-plus small flats, of which about 10 per cent were nano flats.
Property developers make the same or even more money when they sell whole blocks of nano flats because square foot for square foot, such a flat is not cheaper and may even be more expensive than larger-sized units in the same or comparable neighbourhoods.
Meanwhile, the government can claim more flats are being released annually and that it is actively tackling the problem of home supply. People can expect more tiny flats flooding the market in the future, unless there is legislation, most unlikely, putting a limit to the ever shrinking sizes.
And please don’t tell me that now the opposition has been neutered, there is no one to monitor the government and tycoons. Those “pan-democratic” old-timers were even friendlier with the tycoons than the government. Remember during the 2019 unrest, the rioters never targeted their business interests, even though they were everywhere across the city.
Unless Beijing cracks the whip, there really is no solution to the housing crisis.