Demand for Hong Kong’s ‘nano flats’ could slow down, as prices dip and bigger homes become more affordable
- Soyo, a nano flat development in Mong Kok, sold only 33 per cent of all 120 flats on offer earlier this month
- Nano flats will be bought purely for investment purposes in the future, analyst says
Demand for flats that measure less than 200 sq ft – the so-called nano flats – could slow down as home prices head downwards after peaking in September last year, market watchers said.
These flats, which were once snapped up like hot cakes especially by younger buyers, appear to have lost their appeal. Soyo, a nano flat development in Mong Kok, sold only 33 per cent of all 120 flats on offer earlier this month. The 152 to 228 sq ft flats were priced starting at HK$3.38 million (US$433,761). In contrast, of the 100 units on sale at The Henley in the Kai Tak area, which started from HK$6 million for 186 sq ft units, 70 per cent were sold in September.
“Home seekers are likely to afford bigger living spaces during a softening property market,” said Michael Lee, associate director of professional real estate advisory and valuation at Prudential Surveyors (HK).
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Tiny 290sq ft temporary housing a welcome upgrade for some low-income Hong Kong families
The trend would become more obvious, he said, after the government last month set the minimum size for such flats at 280 sq ft for government land. A parcel in Tuen Mun, where provide 2,020 units are expected to come up, will be the first to test this rule. “We will see an increase in supply of larger flats once the government rule is extended to more government plots in the future,” Lee said.
Hong Kong’s lived-in home prices retreated 1.4 per cent between September and December, according to an index published by the city’s Rating and Valuation Department on Thursday.
Nano flats will be bought purely for investment purposes in the future, Lee said, adding that the change in government rules could sap the demand for such flats.
“No one will disagree with the fact that everyone wants to live in bigger flats. But whether one can afford this is another question,” said Derrick Pang Yat-bond, the CEO of Asia Allied Infrastructure Holdings (AAIH), which developed Soyo. The company said nano flats will still be sought-after among youngsters and investors.
