A motorway is seen in a gap between residential buildings (left) and a hotel (right) in Hong Kong on May 12, 2021.
(ANTHONY WALLACE / AFP)
HONG KONG – A minimum flat size threshold of 280 square feet in saleable area, that will be imposed on developers in a land sale clause for the first time, could help improve living conditions and reduce the number of “nano” flats in Hong Kong in the long run, real estate analysts say.
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The government will put out for tender a residential site in the fourth quarter of this financial year, where an estimated 2,020 flats can be provided. The total private housing land supply in the fourth quarter would be able to provide about 5,680 flats, the Secretary for Development, Michael Wong Wai-lun said on Thursday.
Together with the 14,400 units supplied in the first three quarters of the financial year, the annual private housing supply will reach 20,080 units, exceeding the annual target of 12,900 units by 55 percent, the best performance in the past four years.
Buggle Lau, chief analyst at Midland Realty, says he expects new land measures will reduce the number of residential units if land supply remains inadequate, while he believes that there will not be immediate pressure to adjust property prices
Buggle Lau, chief analyst at Midland Realty, says he expects new land measures will reduce the number of residential units if land supply remains inadequate, while he believes that there will not be immediate pressure to adjust property prices.
It will not affect developers’ willingness to invest in land, as market demand is still strong, Lau added.
Lawrence Poon Wing-cheung, a senior lecturer in the division of building science and technology at City University of Hong Kong, said that the limit on the number of square feet is appropriate and the first installment is expected to be several hundred thousand dollars, which is not considered an excessive burden on the public.
He said he believes that the new mandate will eventually reduce the number of “nano” flats, something that has become a trend as property prices continue to rise.
However, some experts are taking a cautious view of the new land policy. Martin Wong, head of research and consultancy for Greater China at Knight Frank, said that while it would have a positive effect on increasing the amount of living space per person, it would affect the agreed price of development.
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The price per square foot of a small unit was higher than that of a large unit according to past data. If the minimum saleable area is restricted, the price of a unit would increase for first-time buyers, Wong said.
Tony Tse Wai-chuen, a member of the Legislative Council for architectural, surveying, planning and landscape, believes that the inclusion of minimum area requirements in the land sale conditions is only a stopgap measure and may even make it unaffordable for some first-time buyers.
The government should also speed up the supply of homes to address the imbalance between supply and demand, as adequate housing provision will make it easier for people to live comfortably, Tse said.