Government Sets Minimum Size for Flats

Wong sets minimum size for flats on govt land to 280 sq ft

Finally the Hong Kong government has decided to take a stand and determine the minimum size of a flat.

Secretary for Development Michael Wong Wai-lun has determined that flats on government land can be no smaller than 280 square feet. We're assuming this is the amount of actual living space in the flat and not including public areas...

There are still lots of nano flats on the market

When asked why 280 sq ft was chosen, Wong said another subsidised project at Anderson Road in Kwun Tong had a minimum size limit of 250 sq ft that was used as a reference point. As the Tuen Mun parcel is a private piece of land, that is one step higher on the housing ladder (than one on government land), so the threshold was taken to 10 percent higher.

Government officials are not actually looking at the size of flats and saying, "This looks liveable to me,", but rather "What's the going rate now?" which is not how to solve the city's housing woes.

Have these senior ministers actually walked inside a 250 sq ft or 280 sq ft flat and asked themselves if they could actually live in there with all their stuff?

Apparently this is not how they do things.

"Now that we have set the rules of the game clearly, [developers] will not need to worry about their peers benefiting from a layout with very small units," Wong said. "We think it is a level playing field. It is a very fair-game rule."

How about a flat almost twice the size of this?

For the developers yes, but not the buyers, many of them young people trying to get onto the housing ladder.

Wong was not worried about the establishment of the minimum size affecting home-buying options as there were still plenty of flats measuring smaller than 300 sq ft.

The question now is what will happen to the values of the flats that are smaller than 280 sq ft? Will they be less valued because they don't make the grade anymore?

Hopefully with the minimum space determined, then we will see the end of nano flats, those smaller than 200 sq ft, though some real estate experts say the 280 sq ft will price many out of the market. 

A never-ending vicious circle...

Tiniest Subsidised Flats for Sale

The subsidised flats occupy the former airport at Kai Tak

The Hong Kong Housing Authority's mandate is to provide affordable rental housing to low-income families with housing needs, and to help low- to middle-income families gain access to subsidised home ownership.

That's what it says in its website.

However next year's batch of subsidised homes the authority will sell will be as small as 186 square feet -- the equivalent of one and a half car parking spaces, the tiniest flats to be offered since the start of the Home Ownership Scheme in 1978.

The smallest flats will be 186 sq ft

The 320 small units are on the site of the former airport at Kai Tak, among the 8,925 subsidised flats to be for sale in the first quarter of next year.

About 30 percent of the new batch are smaller than 322 sq ft. Such flats are increasingly making up a bigger portion of the authority's supply, accounting for 22 percent in 2020, and 15 percent in 2019.

Francis Lam Ka-fai, vice-president of the Institute of Surveyors and its spokesman on housing policy said that while he supported the 49 percent discounts on the units, he slammed the micro-flats on offer, saying they had "become a joke".

"That's really undesirable. Why did [the authority] go for such small units? I don't know what their rationale is," he said. "In terms of the design, [anything] less than 200 sq ft is really undesirable for anybody." 

We fully agree.

The tiny flats may look like this. Appealing to you?

And to even qualify for this scheme, a single person can have a monthly salary of no more than HK$34,730 and assets worth no more than HK$925,000, while for households of two or more people, they must earn no more than $69,740 and own assets worth less than HK$1.85 million.

Who wants to live in 186 sq ft discounted HK$1.24 million (US$158,900)? What can you even fit in there? Can someone really live happily in such a tiny place? And they would have to live in it for 15 years before being allowed to sell it. 

If the government wants to encourage a higher birthrate, it really needs to build bigger subsidised flats to start with. How can one even get married let alone have children in 186 sq ft? Have these housing officials even seen how tiny that space is? 

It boggles the mind...

Buy a Nano Flat with a "Garden"

Ground floor hard to sell so developers lure buyers with patios

In North America, some people are moving away from the downtown core, or central business district and getting larger homes in the suburbs where they can have more space.

Try doing the same kind of thing in Hong Kong and you'd need to be a zillionaire.

#Lyos in Hung Shui Kiu has patios with nano flats

But there's there's private developers designing nano flats -- with patios.

#Lyos, a project in Hung Shui Kiu in the New Territories developed by CK Asset Holdings, 58 ground-floor flats, mostly studios and one-bedroom units -- come with a patio, which is not included in the saleable area of homes.

The nano flats have what are described as private gardens between 53 and 295 sq ft.

Of the 341 flats in #Lyos, 184 of them range between 202 and 292 sq ft. The project will be completed two years from now.

An example of a nano flat layout for one person

All 40 of the ground floor nano flats that came with gardens -- actually patios -- were snapped up with in a day when they opened for sale in two batches earlier this month.

A 217 sq ft studio with a 201 sq ft patio costs about HK$4.7 million (US$603,000), or HK$21,645 per sq ft, whereas a 206 sq ft flat one floor up costs HK$4.14 million or HK$20,073 per sq ft.

But perhaps this is the developer's way of selling ground floor flats, as they are usually harder to sell --  why not design a larger liveable space than a nano flat with "a garden"? How is that more liveable? It's jus absurd.

But alas the Hong Kong government doesn't seem to think it's necessary to rein in developers with their misleading marketing language to lure buyers in.

Manor Hill promises a "staycation" experience

One housing development called Manor Hill by Kowloon Development in Tseung Kwan O, studios and one-bedroom flats ranging from 203 to 300 sq ft make up about 90 percent of the 1,556 homes in two towers.

The average price is HK$20,921 per sq ft, making it the most expensive new launch at Lohas Park, Hong Kong's largest private housing project.

The developer said the clubhouse and garden, which covered 49,000 sq ft, provided facilities "comparable to five-star hotels", giving residents a "staycation-like" experience.

Seriously?

This is why people do staycations in the first place -- their flats are tinier than hotel rooms.

Living in a nano flat is definitely not comparable to five-star hotels. You don't have a butler waiting on you, and your food is prepared by a microwave because there's no room for a stove.

How does nano flat compare to Rosewood?

The government plans to pass a law to prosecute for "fake news". How about "fake descriptions"?

It's making a joke out of young people desperate to climb the property ladder...

Buyers Battle Out for Flats Under HK$5M

The Met.Azure has a "sea view", and 25 minutes from MTR

 

It's quite incredible that despite the coronavirus pandemic that caused lots of people to lose jobs or businesses went belly up that the Hong Kong real estate market continues to be red hot.

The project features nano flats less than 300 sq ft

This weekend developer Wang On sold out all 143 flats at its The Met.Azure project in Tsing Yi, with 13 buyers for every available flat that is not that convenient -- a 25-minute walk to the Tsing Yi MTR station. The project, which will be scheduled to be completed by December 2022, has micro flats ranging from 181 sq ft to 257 sq ft, with prices from HK$3.89 million to HK$4.61 million respectively, an average of HK$20,638 per square foot. 

The flats are aimed at first-time buyers, who can get up to 90 percent mortgage financing.

"There is strong demand for this type of flats, which allow [first-time buyers] the chance to enter the market with budgets of less than HK$5 million," said Midland Realty's residential division chief executive Sammy Po. "There's even full sea view" from the flats, he said. 

How does one squeeze into a flat less than 300 square feet? The bed is hoisted up like a bunk bed to give the impression of more space. Creative, but definitely aimed at buyers in their 20s and 30s.

Bedrooms are bunk beds, above living space

Nevertheless, analysts believe that with the pandemic under control in the city, and unemployment rates going down, people feel more confident in investing in a home -- despite almost 90,000 people left in the past year.

Maybe they are taking advantage of people leaving, as some 10,000 homes were sold this year, up 20 percent this year.

The Housing Affordability Index climbed to 75 percent in the second quarter, way above the 20-year average of 47 percent. This means home prices are still losing touch with economic fundamentals and residents' affordability. 

It's also quite amazing young people are prepared to spend the next 20, 30 years paying off for these nano flats in a bid to get up the housing ladder... in less than 10 years will the average price be HK$30,000 per square foot?

Can You Live in 123 Sq Ft?

How small a space can you live in? One developer thinks it's 123 sq ft

We talked about incredible-shrinking flats yesterday and now they're getting smaller. A developer, Wing Kwok Enterprises, will be building a 27-storey residential block in Sham Shui Po where the smallest unit will be 123 square feet.

To put that into perspective, that's smaller than a 20-foot shipping container, or an American-sized parking space.

"At that size, the unit will most likely feature only an open kitchen, and a shower room, which typically add about 10 percent of the total area," said Victor Lai Kin-fai, a managing director of Centaline Surveyors.

Why so small?

"The average square footage price of smaller flats will be higher than larger apartments, which will further encourage developers to build ever smaller units," he said.

Is it no wonder then, that 27 percent of Hongkongers don't expect to ever afford a home, which "definitely deserves everyone's attention," said Nerida Conisbee, chief economist of REA Group, a digital advertising firm that specializes in property.

REA conducted a survey of 1,003 respondents that showed another 16 percent of people have no plan to buy property at all because prices are beyond their reach.

Has Secretary for Transport and Housing Frank Chan Fan actually seen a microflat? Has he spent the night in one to find out first hand what it's like to live in such cramped conditions?

Hong Kong government officials really have no idea what the average Hongkonger goes through on a daily basis...

Incredible Shrinking Homes

How small a space are you willing to live in? Or rather you can afford?

The housing issue in Hong Kong continues to heat up. In the last day or so, there have been reports that there will be more and more microflats coming into the market in the next few years.

Last year there were 691 units on the market, over eight times more than the 79 in 2015; smaller flats between 215 sq ft and 430 sq ft jumped to 6,200 last year, from 2,056 in 2015. The Hong Kong government forecasts 6,852 private flats smaller than 430 sq ft will be completed this year, accounting for 38 percent of the overall supply of 18,130 private flats this year.

Tiny spaces leave people feeling claustrophobic and depressed

There have been calls to regulate the minimum size -- some of which are smaller than the dimensions of a jail cell here. Our Hong Kong Foundation that's run by former chief executive Tung Chee-hwa has estimated the average size of private flats completed between 2018 and 2022 would be 681 sq ft, or equivalent to five standard parking space -- an 18 percent decrease from the average of 833 sq ft in the past decade.

Researchers say the trend of building microflats getting smaller will continue. Developers say that's because there is a demand for them, especially from those buyers who want to finally own a home, but at what cost financially and in terms of mental health? How is a tiny cramped space good for one's self esteem? How many years will it take for them to pay off the mortgage?

Pro-government lawmaker Alice Mak Mei-kuen from the Federation of Trade Unions said the government needs to safeguard buyers' rights.

"I know that many buyers now feel regret after purchasing nano flats. Even if the government won't legislate a flat's minimum size, will you consider introducing guidelines about it?" she asked.

How long can someone live in a tiny space like this?

However, Secretary for Transport and Housing Frank Chan Fan said there was no need to regulate the size of flats because buyers wouldn't be able to afford bigger ones due to rising property prices.

"If we set out some guidelines stipulating the minimum floor area of a flat, it means that aspiring home buyers will face a minimum price for a larger unit. Will they be able to afford this [greater] minimum price? We have big reservations about this," Chan said.

Land supply, he says is the issue. Perhaps that's because the government is constantly pushing its agenda of reclaiming more land on Lantau that has received a lot of opposition because it disrupts the environment and the species that live in the area.

We've been calling for the government to put more effort into re-developing brown sites, but there hasn't been much in the news about it seriously looking into these areas. The sites may seem small, but they add up and it's the more sustainable way to go. And maybe it's time to stop the quota of allowing 150 mainlanders to settle here everyday? Just a thought.

It's time for the government to be more creative; blaming market demand is not the answer.

Size Matters

Architect William Lim's conceptual flat with two bedrooms in 194 square feet

There's much discussion about nano flats -- the hottest selling housing units in Hong Kong these days, because many young people are priced out of the market and can only afford the tiniest of flats -- less than 200 square feet.

If a couple shares a nano flat, a lot of gymnastics is required to flexibly move around the tiny space, as well as hardly any possessions, but one Hong Kong architect seems to think he has the answer.

Architect William Lim and his creative design ideas...

Architect William Lim, managing director of design firm CL3 says: "We should think of them as three-dimensional spaces. We have traditionally looked at spaces as floor plans, but if we start looking at them in three dimensions, we could have different levels within the space."

He has created a conceptual flat that consists of two bedrooms, a kitchen and a living room -- in 194 square feet or 18 square metres. Lim is able to achieve this by putting the bedrooms on top of the bathroom and kitchen.

While the concept is not new, particularly in places like Japan, Lim says flats in Hong Kong have a minimum height ceiling of 2.5 metres (8.2 feet), and some are as high as 10 feet, which makes "a flat within a flat" possible.

He also wants to prove that a space doesn't have to be completely utilitarian -- the show flat will be decorated with high-end furniture, including a Baccarat crystal chandelier.

One of the nano flats in Mont Vert in Tai Po

Lim says when it comes to living in style, quality of space, not quantity is most important.

If a developer gave him the opportunity to design a block of flats, he would probably never be able to do it his own idealistic way. Developers are not interested in having too high a ceiling when they can cram more units into the same volume of space. They and their management companies want to collect as much in management fees as possible...

And then his comment of quality of space and not quantity is important is completely out of touch. If someone can barely scrape enough together for a down payment for a 200 square foot apartment, they are not going to be able to afford a Baccarat chandelier, nor would they want one. The same goes for designer furniture. It's all well and good to make a show flat look enticing, but in reality, those who can afford to buy these tiny living spaces will probably hit Ikea and not Tom Dixon.

Oh and the ones who can afford to buy more than one of these flats are probably landlords so they won't be installing crystal chandeliers in a rental.

We like Lim's idea of trying to use vertical space as much as possible, but he's not being realistic.

And the psychological impact of living in tiny spaces can't be healthy. How is that quality of life?

Trying to sell nano flats as an idealistic aspiration mocks the people who are struggling to enter the housing market with the tiniest of flats. Size does matter.