City Beat | Whoever leads Hong Kong next will find housing thorniest issue

Here’s a multi-million dollar question: is it wise to buy a “capsule” flat measuring no more than 200 sq ft that will cost an arm and a leg?

At a recent public function, I bumped into Paul Chan Mo-po, the development minister whose top priority is to look for land for the government to meet its housing targets. We chatted about the collective headache of the entire city – owning a home – and touched on a hot topic: the apparent proliferation of tiny little flats in Hong Kong’s property market these days.

It seems to have become the new normal for developers to build continually shrinking units, ostensibly to meet the demand from anxious homebuyers who simply can’t afford regular flats and worry that their savings will never catch up with soaring prices. The phenomenon has prompted quite a lot of debate recently on whether the government should regulate a “minimum” home size for the private property market.

Though it was a social gathering and not a suitable venue for such a serious discussion, Chan was accommodating enough to explain that it would be difficult at this stage for the government to impose too many regulations in a free economy. That includes dictating a minimum living space per unit for developers, despite calls for intervention on the part of authorities to enforce some limits.

Then someone in the group raised a question: who would want to live in a flat measuring less than 200 sq ft for good after all, presuming they would seek to upgrade to a bigger flat later when affordability allowed? And would that lead to an active second-hand market for small flats of this type?