Secretary Frank Chan Fan believes that regulations may raise home prices.
Secretary for Transport and Housing Frank Chan Fan has rejected calls to regulate the size of new private flats being completed in Hong Kong even as micro flats mushroom in the city as housing alternatives in the city’s chronic land shortage problem.
“If we set out some guidelines stipulating the minimum floor area of a flat, it means that aspiring homebuyers 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,” he said at a special finance committee meeting of the Legislative Council.
Micro flats or homes less than 20 square meters or about 206 square feet are mushrooming in Hong Kong amidst a scarcity for space and lack of housing alternatives.
The tiny flats accounted for about 4% of private residential units completed in 2017, according to data released to legislators on Monday, as Hong Kongers quickly snap any and all available homes amidst sky high property prices characteristic of the city’s heated property market.
A new supply of nano flats will be released into the market for an average of 510 units for the years in between 2017-2020, according to JLL, with majority of the flats located in New Territories.
An average Hong Konger earning $50,000 in annual income would need around $900,000 to purchase a home as the city ranks as the most expensive housing market for the eighth year in a row, according to annual Demographia International Housing Affordability Survey, which puts the median house prices divided by annual median household income at 18.1.
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