LIVING in nano flats – tiny apartments less than 200 sq ft – has fast become the norm in overcrowded Hong Kong. More than 500 units are expected to be built in the city every year until 2020, five times the rate of growth of just four years ago. The idea behind them is to help young people get on the property ladder in a housing market that is increasingly pricing them out of the market. But has their appeal lost its shine?
At the start of the boom back in 2014, investors swamped the market, rushing to snap up spaces barely big enough to live in and dividing their developments to squeeze in as many units as possible. But as the spaces get ever smaller and the prices still remain out of reach for many, is time up on Hong Kong’s micro apartments?
The recent dismal sales of Hong Kong’s latest nano development suggest the answer may be yes. At the T-Plus Saturday sale of 73 units, each measuring 130 sq ft (12 sq m), in Tuen Mun neighbourhood, agents only managed to sell two.
According to South China Morning Post, the cost started at HK$2.85 million (US$364,000) for an apartment no bigger than an average Hong Kong car parking space. The lack of interest forced the developer to close the sales launch early, with its chief executive Sammy Po Siu-ming, telling the paper the sales results were “the worst in recent times.”
Hong Kong’s notoriously expensive housing market is set to take a dramatic tumble in the coming months, with numerous credit agencies predicted a 15 percent drop. Some go as far as 25 percent decline.
Once out of reach apartments are quickly becoming more affordable, leaving the cities growing supply of shoebox flats far less appealing.
For example, the cheapest of the flats that failed to sell at the T-Plus sale on Saturday was over US$360,000 and that only bought you 128 sq ft. For that same price, it’s now possible to get a 299 sq ft apartment in Yuen Long neighbourhood.
Developers’ greed for more units and more money has also led to increasingly smaller flats. In a city with no legal limit for private residential homes, apartments have continued to shrink.
In 2016, a developer filed plans with Hong Kong’s buildings department to convert a commercial building into 68 apartments, some as small as 61.4 sq ft – less space than a standard prison cell. In March this year, A 209 sq ft unit in Hong Kong’s Pok Fu Lam area was sold for HK$7.9 million (HK$37,700 per square foot), a record price for micro-apartments in the city.
The risks of living in such small spaces has been well researched and it’s not good.
Cramped living environments have been linked to depression and anxiety. According to the Guardian, crowded living environments also affects concentration, especially in children, and is linked to a higher prevalence of domestic violence and substance abuse.
T-Plus may be the first to experience the end of the boom in nano-flats in Hong Kong. What will become of the thousands of others stands to be seen.