Because the housing options in Hong Kong started to be rather short, due to the high demand, nano flats represented one of the best choices a couple of years ago. A nano flat is a very small living area, smaller than the space dedicated to parking a car. Due to its very reduced size, it was possible to build a higher number in a rather short time, so that the demand could be met. Practically, this type of residential unit offers the owner the chance to sleep somewhere safe and warm, but that was about it. When these units first emerged, they managed to grab the attention of home seekers. But, as it appears, the popularity of the nano flats is beginning to significantly drop.
In the past days, 73 nano flats were put out for sale, but the number of people that manifested interest in this kind of units was incredibly small. The units offer surfaces of only 12 square meters or 129 square feet and were once marketed with the image of an emperor needing just a bed for sleeping, in spite of having an entire palace at his disposal. Still, out of the 73 units available, only 2 of them found new owners. While these units were the ideal solutions for home buyers with limited budgets, the fact that their prices started to sag makes people direct their attention toward other kinds of units. Practically, changes in price make people look for units that come at similar price tags but offer more living space.
But prices in Hong Kong didn’t drop just for nano flats. A significant decrease was recorded in all categories of residences. Since August 2018, when a peak was reached, prices dropped with 6.3%. Also, according to stats released by Midland Realty, the volume of new homes purchased in the month of November reached the lowest level since 2016, when the last plummet of this kind happened. If we are to look at numbers from the past, contrary to what many may believe, small flats are the ones that suffer the most when there are price changes on the market. As an example, between 2015 and 2016, a decrease of 12% was recorded in the case of apartments with surfaces smaller than 40 square meters. This is in comparison with a decrease of only 9% in the prices of apartments with surfaces between 70 and 100 square meters, in the same period.
This type of news comes as an unfortunate one for developers that placed their bets on nano flats. There are quite a few that saw the craze around this type of flats as a way to make good earnings. But now, they will run into difficulties when it comes to selling their units. Also, new nano flats are on their way, planning to be finished between 2019 and 2020. More precisely, 3,300 more units of this kind will be launched in Hong Kong in the coming years, which means that developers will come up with 35% more units than those developed in the past three years.
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