Wave of new nano flats to the market over the three years
Hong Kong's nano flat supply set to grow 35% from the previous three year period
HONG KONG, 28 August 2018 – About 3,300 new nano flats (saleable floor area of 200 sq ft or less) will be completed between 2018 and 2020, up 35% from the previous three-year period (2015-2017), according to JLL's latest Residential Sales Market Monitor released today.
The new supply of nano flats represents over 4% of total housing supply over the next three years. Notable upcoming developments with nano flats include 'Upper East' in Hunghom with about 450 flats and 'T Plus' in Tuen Mun with about 280 flats.
The figures not only show developers building more nano flats, but also smaller flats. Of the 68 flats at 'The Unit', a new serviced apartment project in Happy Valley developed by Emperor Group, 64 are nano flats with a saleable floor area as small as 91 sq ft. Despite their small size and eye-popping rents, which can be as high as HKD 124 per sq ft per month, nearly all flats were leased within a few months of being made available, reflecting the general acceptance of nano flats by users in the market.
A new upcoming development at Area 1a/1b in Discovery Bay, is set to test the limits on how small nano flats can go. The smallest units at the project have a saleable floor area of less than 90 sq ft.
Henry Mok, Regional Director of Capital Market at JLL, said: "The relatively more attractive lump sums involved in the purchase of nano flats has led to buyers piling into the market. With the growth in salaries lagging home prices, developers are now adjusting the sizes of flats built to maintain smaller lump sums that can be absorbed by buyers,"
Cathie Chung, National Director of Research at JLL, said: "The popularity of nano flats has seen supply skyrocket in recent years with construction spreading from the city's urban areas to more decentralised regions. And with the introduction of the new vacancy tax announced at the end of June, we expect this trend to continue as developers build more affordable housing units; which can be more readily digested by the market."
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