As 209 sq ft Pok Fu Lam flat sells for HK$7.86 million, any wonder why one in four Hongkongers can’t ever afford a home?

A 209 sq ft unit was sold for HK$37,651 per square foot, setting a record for the micro-apartments in the city

PUBLISHED : Tuesday, 20 March, 2018, 8:34pm
UPDATED : Wednesday, 21 March, 2018, 12:05pm

An apartment unit slightly bigger than a standard shipping container sold in Hong Kong for HK$7.86 million (US$1 million) this week, as a survey showed one in four residents in the world’s most expensive city said they do not ever hope to afford owning a home in their lifetime.

The 209-sq ft flat at the Pok Fu Lam neighbourhood on Hong Kong Island sold for HK$37,651 per square foot, a record price for so-called micro-apartments in the city. 

Kowloon Development, a mid-sized builder, said it had sold 60 per cent of the 350 units at the 63 Pok Fu Lam project, including 11 units ranging from 209 sq ft to 310 sq ft, with prices up to HK$11.29 million. 

Data that shows 27 per cent of Hongkongers do not ever expect to afford owning a home “definitely deserves everyone’s attention,” said Nerida Conisbee, chief economist of REA Group, a digital advertising firm that specialises in property. The REA survey of 1,003 respondents carried out by Nielsen showed that another 16 per cent of people have no plan to buy property at all because prices are beyond their reach. 

Home prices in Hong Kong rose for the 22nd consecutive month in January, with the price index soaring to a record 357.5, according to the Rating and Valuation Department. 

Compare the average housing price with the city’s median salary of HK$17,200 per month, the average Hong Kong wage earner needs 30 years’ worth of monthly income to afford a HK$6 million property, Conisbee said. 

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The inability to afford owning homes is spilling over into social problems, forcing couples to delay getting married, REA said, citing its data. 

With the yawning affordability gap, micro-apartments – also known variously as nano flats, capsule homes or shoebox homes – will “increase in popularity, as they are generally more affordable,” he said.

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The data shows it. Nearly half of respondents who do plan to buy property, at 48 per cent, said they were eyeing micro-apartments if prices were reasonable. Thirty per cent of these purchases are for their own use, while 25 per cent will be for investments.  

Still, buyers of the latest innovation in close-quarter living should beware the rush of developers, which may lead to an oversupply of these types of property, he said.

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At least 2,100 micro-apartments are expected to be completed in Hong Kong between 2017 and 2020, or about 510 units every year, according to property consultant JLL. That is five times the annual pace between 2014 and 2016, JLL said. 

Among them is Henderson Land’s South Walk.Aura project in Aberdeen, where 70 per cent of the 142 available units are each smaller than 200 square feet. A standard 20-foot shipping container measures 165 square feet, while a standard UK-size car parking space is 126 square feet.