HK’s new shoe box flats sellout in a day ... at S$522k each

HONG KONG — A real estate developer offering nano-sized flats in Mong Kok sold all the units on offer in one day despite the parking-space-sized apartments costing around HK$3 million (S$522,400), in another sign of their growing popularity.

The first batch of 98 units offered on Sunday were all sold by the evening, according to figures obtained by the South China Morning Post.

The Novi development featuring 138 one-room flats, with saleable areas between 157 sq ft and 312 sq ft, attracted more than 1,200 prospective buyers to register prior to the sale.

Developed by Lai Sun Group, the smallest apartment at the 25-storey Novi in Mong Kok is a 157 sq ft flat on the second floor, which includes a 38 sq ft terrace, being offered for HK$3.06 million. It is little bigger than a Singapore parking space.

After factoring in a discount of 9 per cent, the price will come down to HK$17,788 per sq ft (psf), or HK$2.79 million — the cheapest flat offered in the project.

Many buyers were young and came to the sales office with their parents, said Mr Sammy Po Siu-ming, residential chief executive of Midland Realty. He estimated that 30 per cent of Novi buyers were investors, not end-users.

“About 60 per cent of the buyers were born after 1980, with a half of them needing certain help from their parents to fund the downpayment,” Mr Po said. Local developers are offering the smallest flats they can because sky-high home prices in Hong Kong have greatly stymied purchasing power in the city.

The flood of lower-priced nano flats onto the market seems to support the continued demand for new flats.

The Hong Kong authorities have also forecast that almost half of all flats completed next year will be smaller than 400 sq ft in size. In contrast, 206 nano flats were completed last year out of a total of 15,595 units across the city, making up 1.4 per cent of new apartments, up from only 81 nano units completed in 2013.

The strong sales results at Novi were in contrast to a Citibank survey released late last month that indicated only one out of 100 Hong Kong people considered the second-half of this year a good time to buy homes in the city.

That’s despite more than half, or 57 per cent of the respondents, still expecting home prices to rise in Hong Kong. Buyers of Novi units need only to come up with an initial deposit of HK$280,000, or 10 per cent of the cost of the smallest 157 sq ft flat, compared with the 40 per cent down payment for flats costing more than HK$7 million. SOUTH CHINA MORNING POST