Could nano apartments — billed as one way of solving Hong Kong’s chronic housing shortage — be on the way out as quickly as they grabbed the public’s attention?
Two years ago, when the developer of a residential project in the New Territories unveiled units smaller than a parking space, an executive was quoted as saying: “Even the emperor living in a place as big as the Forbidden City still slept on a bed.”
Even so, it seems that ordinary residents are having second thoughts about super-tiny apartments.
A sale over the weekend at the project, where some dwellings measured just 12m2, failed to attract much interest, with only two of the 73 units on offer selling.
“The rise and popularity of nano flats is largely centered around their relative affordability for buyers with limited budgets,” Jones Lang LaSalle Inc head of research Denis Ma (馬安平) said. “When housing prices start to sag, demand for these types of properties usually plummets as buyers turn their attention to larger units at the same price point.”
A slide in home prices is already under way in Hong Kong. Property prices have declined 6.3 percent from their August peak, Centaline data showed, while Midland Realty last month said that new-home sales that month were on track to be the lowest by volume since early 2016.
History suggests that small apartments tend to suffer more when there are price adjustments: The cost for units measuring less than 40m2 dropped 12 percent during the 2015-to-2016 price correction versus a 9 percent dip for those measuring 70m2 to 100m2, government data showed.
This will come as bad news to home builders hoping to cash in on the short-lived tiny craze, where apartments the size of a Tesla Model X were last year selling for about US$500,000.
Jones Lang LaSalle predicts that 3,300 new nano flats measuring 19m2 or less are to be completed between this year and 2020, up by 35 percent from the previous three-year period.
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