Three out of 10 HK flats under construction are now ‘mini-flats’ as home prices soar beyond the reach of general public
Building started on more than 3,200 flats at less than 200 square feet in size in the first five months of 2017, that’s 30pc of the total new flats currently under construction
Three out of 10 units under construction right now in Hong Kong are micro-flats, sized less than 200 square feet, as prices for anything much larger soar beyond the reach of the average buyer.
More than 10,470 units in 26 private residential projects were approved by the Buildings Department to begin work in the first five months of the year, according to a survey by South China Morning Post.
Building plans for these approved projects show more than 3,200 flats are less than 200 square feet in size, 6 per cent more than at the same time last year, and 30 per cent of total new flats currently under construction.
“I won’t be surprise seeing more nano flats coming onto the market,” said Lawrence Poon, senior lecturer in Building Sciences and Technology at City University of Hong Kong.
“Developers will produce units that can sell and are building smaller unit sizes. Higher prices can be generated by developers in terms of dollars per square ft.”
Henderson Land Development’s “Novum West” at Queen’s Road West is one of the 26 projects offering the tiniest flats. The project has 645 units, with sizes starting at 174 square feet right up to 1,258 sq ft.
Some floors are made up of 22 units – compared with the generally accepted average of eight per floor in normal apartment blocks – to maximise the number of units being built in the 37-storey single tower which includes a basement and podium level. The residential block will have eight elevators.
“With so many flats being squeezed into one block, I can imagine residents on high floors will have to wait a long time for a lift during rush hours in the morning,” said Pang Shiu-kee, managing director at S K Pang Surveyors.
“In the old days, only government-subsidised housing estates had 20 units each floor to accommodate more people,” he said.
In May, Henderson Land sold more than 220 units, priced at HK$5-12 million, when it launched Novum West, achieving the highest selling price of HK$43,000 per sq ft. The project is expected to be complete by September, 2019.
Since June 2013, the government has relaxed the rules, allowing developers to pre-sell new residential projects 30 months ahead of completion date, up from 20 months, to increase private flat supply.
Pan said the entry level for tiny flats, particular in urban areas, would be lower for youngsters .
A 150 sq ft nano flat might cost around HK$3 million, but prices for a 300 sq ft could be double or even more.
A young buyer, with the help of their parents, could put down an initial deposit of HK$1.2 million for one of those HK$3 million nanos, giving them a monthly mortgage instalment of about HK$7,760 assuming they secure a standard HK$2 million bank loan, spread over 25 years, at 2.5 per cent interest.
In the past fortnight, sales of new homes have been dominated by mini-flats.
Buyers, for instance, snapped up more than 220 nanos the size of an average car parking space, for nearly HK$3 million each at the “Novi project” in Mong Kok, and “Edition 178” in Kwai Chung.
“Instead of renting subdivided flats, people now prefer to buy one of their own,” he said.
“That explains why developers have turned to creating sub-divided flats.”