Nano Flats Lose Their Value

Nano flats are passed over for one- and two-bedroom homes

Remember Hong Kong's nano flats, some no bigger than a parking space and costing millions of dollars? Some young people bought them a few years ago, thinking this was their way to get their foot in the door of the property market and hopefully move up from there.

But now they will be stuck.

As the property market has softened due to people emigrating and interest rate hikes, resulting home values dropping by 14 percent this year, buyers can afford to get more for their money and are looking to purchase one- and two-bedroom flats instead.

T Plus flats were recently sold at a loss

First-time home buyers can also buy properties by only making a 10 percent down payment. The cap on housing value for this arrangement was lifted to HK$10 million (US$1.28 million) from HK$8 million in February.

As a result buyer interest in nano flats has waned. Remember T Plus in Tuen Mun, where some of Hong Kong's smallest flats were only 128 square feet big? Since October seven out of nine transactions at this three-year-old complex were sold at a loss.

In one of the recent transactions, the owner had to take a 21 percent loss, compared to 16 percent since 2019 for other properties when sellers first bought their homes.

So much for trying to climb up the property ladder when the lowest rung leaves you in the red...