It is well known that Hong Kong has some of the most unaffordable housing in the world and that one response to this has been to build increasingly smaller homes — some with the moniker of “nano apartments.”
But then earlier this year Beijing decided that these nano apartments are actually too small for people, and so a new rule was created requiring homes in Hong Kong to be no smaller than 280 square feet.
At the same time, interest rates obviously went up, the price cap on homes that can be bought by a first-time buyer with just 10% down was increased, and people have continued to leave Hong Kong for places that are, I’m guessing, more open and less Chinese.
The unsurprising result is that home prices are now down some 14% for the year, according to Bloomberg. But the other interesting thing about all of this is that buyers are now shifting toward larger homes:
Developers were only able to sell 48% of the studio apartments available in the first 11 months this year, while the rate for one-bedroom and two-bedroom apartments stood at 53% and 67% respectively, according to Midland Realty.
Even with the interest rate hikes that we have seen, what seems to be happening is that people are starting to take advantage of this softer market to buy something bigger. Hong Kong is still Hong Kong, meaning grab whatever space you can find when you can.