news.com.au July 14, 2017 3:14pm
NANO flats, also known as “gnat flats”, are tiny apartments — even smaller than the car parks they come with.
APARTMENTS in one of Hong Kong’s newest developments are set to receive rents well above market prices — despite their tiny dimensions.
According to the South China Morning Post, the “nano flats” (also nicknamed as “gnat flats”) are about 11.9 square metres in size, but they’ll rent for A$660 per month.
To understand just how tiny these flats will be, it’s worth noting each of the parking spaces in the complex will be about 12.4 square metres in size.
Basically, it’s enough room for a bed ... and really nothing else.
The flats are going for about 19 to 29 per cent above the market average.
“In a sky-high property market like Hong Kong, tenants or buyers with limited budgets only go for smaller lump sum amounts, rather than unit size,” said Cheung Choi-kuen, a real estate expert who focuses on the city’s popular Tuen Mun area.
The newspaper reported developers are targeting first-time buyers who’ve basically given up hope of affording larger apartments.
“Better own a shoebox than rent a decent-size apartment forever,” it observed.
Last year, nano flats accounted for 1.4 per cent of new homes built in Hong Kong.
“With property prices staying high, buying a small flat with a smaller lump sum is the only way some people can afford to buy property,” Buggle Lau Kar-fai, chief analyst of Midland Realty, told the South China Morning Post in a separate article.
“Another issue is the mortgage. Nano flats often cost less, so buyers without strong financial resources may be able to finance their purchase.”
They’re in increasingly high demand, but investors are fully aware their longevity depends entirely on the strength of the economy.
If it drops enough for bigger flats to become more affordable, analysts say no one will choose to live in them and their value will plunge.
At the moment, however, they’re generating a healthy return for investors of up to 3.9 per cent every year.
The nano flats are popular with young professional couples, many of whom are keen to move out of shared housing into their own private spaces.
They’re new, clean and as pleasant as they can be given the space restrictions.
Others, such as students, are being pushed to move into “capsule apartments” — sterile, futuristic modules that resemble shipping containers, barely bigger than a single mattress.
Those less fortunate are sometimes forced to rent “cage apartments”, which are cramped and dirty spaces stacked on top of each other with barely any room to move.
news.com.au July 14, 2017 3:14pm
