Small flats dominate in 2024 as affordability pressures reshape market: JLL

Class A units have seen a sharp rise in supply, accounting for 44.5% of total completions in 2024.

A shift in Hong Kong’s residential development landscape is underway, with smaller flats gaining prominence and major local developers increasing their share of new housing supply, according to the latest report from JLL.

In its Hong Kong Residential Sales Market Dynamics report, JLL noted that Class A units—defined as those measuring 431 square feet or less—have seen a sharp rise in supply. 

These accounted for 44.5% of total completions in 2024, with projections indicating further increases to 53.0% in 2025 and 57.5% in 2026.

The rise in small-unit completions reflects developers’ response to ongoing economic uncertainty, which began when the property market entered a downturn in 2021.

Buyers have become more risk-averse, often delaying purchases or opting for smaller, more affordable units. Lower stamp duties on homes priced under $4m have also supported demand for compact units.

Simultaneously, land acquisition by mainland and smaller local developers has slowed. This has created room for Hong Kong’s largest developers—Sun Hung Kai Properties, CK Asset, and Henderson Land—to expand their influence.

Collectively, the three are projected to deliver 60% of new residential completions in 2025–26, up from less than 40% in the previous two years.

JLL’s Senior Director of Research, Cathie Chung, noted that this concentration could reduce competition and allow larger developers to manage project launches more strategically.