The Rise of the Teeny Tiny: The Incredible Shrinking Apartments of Hong KongPosted: June 2, 2015
HONG KONG— Isabella Steger writes: In showing an apartment of 180 square feet, a real-estate agent explained that all furniture essentially has to be made to order and described the window sill as a potential area for “entertainment.”
“Consumers have no bargaining power. Today if people want to buy property, like a couple who want to build a family, they don’t ask what the square footage is. They just ask about the price.”
— Barbara Leung, who teaches real-estate economics at Hong Kong Polytechnic University
The apartment, in a development called High Place, isn’t much bigger than the standard U.S. parking space. It went into contract in May for almost four million Hong Kong dollars (US$516,000.)
Even by Hong Kong’s cramped standards, apartments here are getting tinier and tinier.
So small are some of the new developments in Hong Kong that they have been given the moniker “mosquito-sized units.”
“People have to sacrifice and crowd into smaller apartments.”
— Joanne Lee, of real-estate broker and consultancy Colliers International in Hong Kong
The incredible shrinking apartments in Hong Kong is part of a broader trend of rising values of residential real estate in major cities around the world, as investors see property as a better investment than low-yielding bonds.
Hong Kong, much like London and New York, also is seeing strong demand from wealthy investors from other countries looking for safe places to park their money, with much of that investment coming from mainland Chinese buyers. While these investors go after higher-end Hong Kong property, they are helping boost prices in general, making it tougher for people simply looking for a place to live.
Hong Kong property prices have continued to rise despite repeated attempts by the government to keep them in check. The average price of private residential property, according to government data, has been on an upward trend since 2009, save for dips during three quarters in 2011 and a very mild correction during 2013 after the government stepped up measures to cool property prices.
“In a development called Mont Vert by Cheung Kong (Holdings) Ltd., controlled by the city’s richest man, Li Ka-shing, apartments even smaller than 180 square feet last year prompted a flood of YouTube videos showing people using arm spans to measure the living area.”
Such price increases have put strains on buyers in many major cities, but nowhere is the squeeze greater than in Hong Kong. Demographia, a U.S. think tank, in a recent study comparing median incomes with median housing prices, ranked Hong Kong property as the least affordable in the world, with home prices on average 17 times annual income, well above the 10.6 for second-place Vancouver. New York ranked seventh, with a 6.1 ratio.
Since 2007, incomes have risen about 42%, but home prices have soared 154%, according to a calculation of data provided by the Hong Kong government.
“People have to sacrifice and crowd into smaller apartments,” said Joanne Lee, of real-estate broker and consultancy Colliers International in Hong Kong.
Frustration over the increasing unaffordability of property in Hong Kong was one of the factors that drew tens of thousands of young people into the streets when students staged months of pro-democracy protests last year in the so-called Umbrella Movement…(read more)
Write to Isabella Steger at firstname.lastname@example.org
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