Hong Kong’s newest micro-sized housing project has been priced at levels that represent a double-digit percentage discount to similar offerings released only a few months earlier.
The offer of cut-price micro flats reflect the eagerness of the developer to adopt an aggressive pricing strategy as the residential market continues to cool.
The 22-storey residential block named AVA 228 – a project in Sham Shui Po featuring 160 flats – has priced the smallest of an initial batch of units, measuring 151 square feet, at HK$18,563 per square foot, or HK$2.8 million (US$356,750), according to a price list released by Magic Sight Holdings on Thursday.
That is nearly 15 per cent lower than the cheapest units offered at micro-flat project T-Plus in Tuen Mun in November.
The flats were the most affordable since February 2016, when a 299 sq ft flat at Sun Hung Kai Properties’ Twin Regency in Yuen Long was offered at HK$2.8 million.
“Developers now do not dare to price their new homes at a high level. Also, nano flats like this have seen extremely bad results recently,” said Derek Chan, the head of research at Ricacorp.
Hong Kong home prices have tumbled 9.2 per cent from August through December, amid headwinds that range from rising mortgage rates, a cooling economy and uncertainties over the US-China trade war.
Nano flats, in layouts of less than 200 sq ft, or smaller than a car park space, have been especially hard hit during the slowdown.
T-Plus, which holds the crown for the city’s smallest flats in configurations starting at 128 sq ft, has sold just two units since its December launch.
CK Asset Holdings executive director Justin Chiu Kwok-hung cautioned in December that prices for tiny flats could tumble as much as 30 per cent in 2019 as demand softens.
“Flats of such small size are not suitable for humans. Cutting out the washroom, kitchen, etc, how much space is left for daily use?” Chiu told the Post on Tuesday.
AVA 228’s showroom, which opened to the media on Thursday, featured a 203 sq ft unit.
“People can use the coffee table for meals,” said Adrian Choi, manager of Wing Shing Land Investment, a unit of Magic Sight Holdings, referring to the apparent lack of a dining area.
“Different buyers favour different products. We target young people who do not have much space at home and are eager to stay in their own space.”
The initial batch of 50 flats offered at AVA 228 will open for subscription on Saturday.
Two tiny flats measuring just 129 sq ft will go on sale later.