2024-05-03 28Hse Editor
The latest data from the research department of Jones Lang LaSalle shows that in 2022, the number of nano buildings (with an area of less than 215 square feet) is expected to be 2,015 units, double the 960 units last year. For the first time this quarter, the government will introduce "square-foot land", but private development or redevelopment projects will not be subject to the relevant minimum area limit. Due to the good sales of small-unit projects such as "Gui Lan" and "Manqiao" last year, Jones Lang LaSalle's "Hong Kong Residential Sales Market Overview" predicts that developers are likely to continue to launch nano-buildings to meet market demand. The bank expects the government to increase the supply of public housing and moderately relax the plot ratios of redevelopment projects that meet the minimum unit size guideline to encourage developers to build larger units.
According to the Rating and Valuation Department, the stock of nano buildings has gradually increased from 9,601 units in 2016 to 12,175 units in 2020, accounting for about 1% of the total private residential stock.
Zhongxing calls for incentives to build large units
Li Yuanfeng, senior director of JLL's project strategy and consulting department, said that the average waiting time for public housing applications in 2021 will reach 5.9 years, the highest level since 1999, reflecting the severe shortage of public housing supply. The government should take the lead in providing an adequate supply of public housing to citizens with limited financial means. Public housing, whether rented or subsidised for sale, can provide citizens with affordable alternatives to nano buildings, while meeting their basic housing needs. If the government can provide enough public housing with a suitable size to meet the needs of most people, the demand for nano buildings will naturally decline. Another measure is to moderately relax the plot ratio of land for redevelopment projects that meet the minimum area unit guidelines as an incentive measure. In fact, granting additional plot ratios not only encourages developers to build larger units, but also helps boost the housing supply in the market.
Huang Zhihui, head of Greater China Research at Jones Lang LaSalle, said that the relaxation of the property price ceiling for applying for high-percentage mortgage loans will help citizens enter the market to buy larger units. Under the current policy, buyers with limited initial budget tend to buy smaller units. If the government can relax the property price ceiling for applying for high-cost mortgage loans, and at the same time increase the applicable mortgage loan-to-value ratio for properties that exceed the property price ceiling (especially HK$10 million), it will help increase the options for home buyers to enter the market and promote larger units demand.
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