Hong Kong buyers give nano flats a wide berth as buyers armed with larger mortgage amounts eye bigger homes
- Only 92 small flats, or those under 280 sq ft in size, were transacted on the secondary market in March, 24 per cent lower than February
- Average price fell 0.7 per cent month on month to HK$4.03 million in March
Only 92 small flats, under 280 square feet, were transacted on the secondary market between March 1 and 28, some 24 per cent lower than February, according to Ricacorp Properties. The average price eased 0.7 per cent to HK$4.03 million, bringing the decline from its May 2021 peak to 4.8 per cent.
The decline in sales and prices of tiny flats mirrors the overall downturn the local property market is experiencing because of the ongoing coronavirus outbreak and the government’s recent higher mortgage amounts for homebuyers, said Joseph Tsang, chairman of JLL Hong Kong.
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“The reason people were interested [earlier] in nano flats was that they did not have sufficient funds but still wanted to buy their own homes, but now the [the new mortgage rules] allow buyers to buy larger flats with larger loans,” he said.
Financial Secretary Paul Chan Mo-po, in his annual budget presented in late February, raised the mortgage amount on homes with a loan-to-value ratio of 80 per cent to HK$12 million from HK$10 million, making larger abodes more affordable to first-time buyers.
Last week, a 193 sq ft studio flat at One Prestige in North Point sold for HK$4.18 million, 14 per cent lower than the HK$4.86 million the owner paid in May 2017, according to agents.
In response to criticism of shrinking homes, the government announced in late February that all private homes to be built in Hong Kong will have to be at least 280 sq ft, unless in rare cases where developers face site constraints or dated leases that may not be subject to the new rule.
