Sun Hung Kai, Wheelock among developers rushing to build small flats as Hong Kong home prices approach all-time high

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The smallest flat in Sun Hung Kai Properties’ upcoming project in Sai Kung has a usable floor area of about 88 sq ft, filings with the Buildings Department show

Developers are likely to take advantage of rising prices in the city to launch small flats as affordability becomes a concern, analyst says

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People wait to choose and buy flats at Kwai Hung Group’s Mangrove project in Hung Hom on September 18. Photo: Xiaomei Chen

Sandy Li

Published: 9:30am, 23 Sep 2021Updated: 11:01pm, 24 Sep 2021

Hong Kong’s biggest developers are joining the rush to build small flats to woo young buyers as prices in the world’s most expensive housing market approach an all-time high. The move is being criticised by a senior adviser to Beijing for its profit motive.

Sun Hung Kai Properties (SHKP) plans to build 5,400 units in Sai Kung, with the smallest featuring a usable floor area of about 88 square feet (8.2 square metres), according to a filing with the Buildings Department.

In Kowloon, a consortium of Wheelock Properties, Henderson Land Development, New World Development and China Overseas Land & Investment plan to build a 1,591-unit residential development with sizes starting at about 120 sq ft. The measurements of flats in both projects exclude space allocated for kitchen, bathroom and balcony, the filings show.

Sales of small flats in recently launched projects have received strong response even as lived-in home prices have increased for seven consecutive months this year. An index measuring the prices of second-hand homes stood at 396.3 in July, just 0.15 per cent below the previous peak of 396.9 in May 2019, data from the Rating and Valuation Department showed. Home prices gained 4.3 per cent in the first seven months this year.

“We will see more small flats put on sale as home prices continue to surge,” said Victor Lai Kin-fai, the chief executive of property consultancy Centaline Professionals. “Frankly speaking, small flats that require smaller lump sum amounts will fetch a higher selling price per square foot and are easier to sell than large units.”