New | More developers expect to build small flats in Hong Kong

A sharp fall in demand for large size units will likely spur more developers to go for small-to-medium sized apartments in a bid to reduce investment risk, according to industry experts.

Last week, Sun Hung Kai Properties (SHKP) applied to the Town Planning Board to change the design on its large residential development at West Rail’s Tin Wing Station to accommodate more flats.

The developer proposed to reduce the unit size by 17 per cent to about 506 square feet each, from 613 sq ft. The change in design will also increase the total number to 1,938, 20 per cent more than the original plan of 1,600.

“Home sales in the primary residential projects are mostly dominated by small sized flats. The marketability of small flats is certainly better than large-sized apartments,” said Buggle Lau, chief analyst at agent Midland Realty.

From January to November, new flats have been changed hands for HK$5 million to HK$10 million and accounted for 56 per cent of total transactions, the highest level since 1996 when Midland Realty started compiling data for property transactions.

A quarter of total new home sales went for less than HK$5 million, up from 18 per cent in 2014.

However, apartments cost more than HK$20 million just accounted for 7 per cent, down from 9 per cent in 2014.