Analysis | Hong Kong’s blight of nano flats will withstand minimum-size rule as affordability remains the top barrier in the world’s priciest city
- The 280-square feet minimum would wipe out many flats priced below HK$6 million, which are eligible for 90 per cent loans, pushing affordability beyond reach for many buyers
- The minimum size will also be a hindrance in land-scarce areas like Hong Kong Island, pushing developers and buyers further afield to the New Territories for larger homes
Hong Kong’s notoriously tiny flats are likely to endure and withstand the minimum size ordered by the city authorities, as affordability remains the biggest challenge for many first-home buyers struggling to get on the first rung of the property ladder.
The 280-square feet (26 square metres) minimum stipulated this week on new projects built on government land would wipe out many flats priced below HK$6 million (US$769,400), which are eligible for up to 90 per cent mortgage financing, pushing affordability further beyond reach for many buyers.
The minimum size will also be a hindrance in land-scarce areas like Hong Kong Island, pushing developers and buyers alike to venture further afield to the New Territories for the larger homes.
“In the New Territories, it is fair to set a minimum size of 280 sq ft for flats, but it becomes less affordable in urban areas where homes are priced at HK$30,000 to HK$40,000 per sq ft,” said David Chiu, chairman of Far East Consortium International, which has built at least three projects with micro-apartments between 198 and 400 sq ft in Wong Tai Sin, Cheung Sha Wan and Tai Wai. Chiu said he supports the government’s minimum.
