Tight squeeze: Demand for nano flats doubles in first eight months of 2018

Units no larger than 300 sqft compose 12.4% total apartment sales in the city.

Bloomberg reports that demand for residential units no larger than 300 sq ft (27.9 sqm) surged by 52% YoY in the first eight months of 2018 as skyrocketing prices are squeezing Hong Kong residents into smaller and smaller flats.

In fact, such dwellings now account for 12.4% of total apartment sales in the city as of August, up from 9.3% last year.

Also read: Home ownership plunges below 50% in 2017 as prices skyrocket

“The rise in property prices has made it difficult for people with less purchasing power to buy a home,” Buggle Lau, chief analyst at Midland Realty, said. “So potential home buyers look for low lump-sum prices rather than a low price-per-square foot.”

Such 'nano flats’ also accounted for about 4% of private residential units completed in 2017. In 2016, only 206 such homes were completed, accounting for 1.4% of the year’s private homes total.

Also read: 2,100 nano flats to be launched until 2020

"Most first-time buyers can afford property costs within $6m. However, that budget would only enable them to buy a sizeable flat at old housing estates (those over 30-years-old) in urban areas given prices having reached record high levels,” real estate consultant JLL said in an earlier report.

Home prices in space-starved Hong Kong rose for the 27th consecutive month after rising 1.644% in June. A small flat under 40 square meters (431 square feet) on Hong Kong Island costs an average of $182,000 ($23,198.01) per square meter, or $17,000 per square foot.

But more than skyrocketing home prices, smaller residential units are also brought about by shrinking family sizes as the number of persons living alone have been surging in recent years.

Here’s more from Bloomberg:

Photo from Mstyslav Chernov - Self-photographed, https://mstyslav-chernov.com/, CC BY-SA 3.0