Small investment: developers build more mini-sized flats to satisfy Hong Kong market demands
Prices are still sky-high and unaffordable to many would-be buyers, prompting some flat hunters to downsize – but these tiny homes can benefit investors
Homes are shrinking at an incredible pace in Hong Kong, as developers race to feed the demand of budget-conscious homebuyers, especially those who are young or first-time buyers.
Residential units of less than 200 sq ft were snapped up at recent launches. And from an investment point of view, buyers can reap big benefits, according to Buggle Lau, chief analyst at Midland Realty, who says mini-sized flats are very popular and attract not only end-users but also cash-rich investors.
“Liquidity is high and we continue to see strong demand for smaller flats. They are easy to rent out and generate attractive yields for investors,” he says.
With property prices staying at near record-high levels, it is not easy to own an average home. Smaller flats mean smaller lump sum initial payments, lowering the hurdle for many buyers desperate to get on the real estate ladder. Many mini-sized flats are now selling at less than HK$4 million each and some ultra-small units are even priced below HK$2 million.
Professor Eddie Hui Chi-man, academic discipline leader of construction and real estate economics at Polytechnic University, says the trend for mini-sized flats is likely to continue as prices are sky-high.
“The lower lump sum means smaller upfront payments, making it easier for first-time buyers to enter the market,” he says. “Developers are providing flats according to the market needs. They do not mind building mini-sized units as long as their properties can sell.”
