Opinion | Nano flats a big blot on Hong Kong’s reputation

A court-ordered liquidation of a nano-flat builder will hopefully mark the end of an unhealthy market trend that has given Hong Kong a bad name and buyers even less value for money. The liquidators of Jiayuan International Group, which specialised in building some of the smallest flats in the local market, have taken over from their provisional counterparts who were first appointed by the court in May last year.

The Nanjing-based developer achieved notoriety in 2019 with the launch of the T Plus complex in Tuen Mun. Some of the flats measured just 131 sq ft – smaller than a standard parking space – and were priced at HK$2.85 million each.

Billed at the time as among the cheapest newly built homes available in Hong Kong and the private sector’s answer to boosting housing supply, they were actually among the most expensive per square foot.

In the decade leading up to then, the city was often ranked as the world’s least affordable urban property market. But flat prices have plunged following the 2019 anti-government unrest, the Covid-19 pandemic and, most importantly, the US cycle of drastic rate increases that may only now be coming to an end.

Hong Kong to sell smaller plots of land to boost sales, development chief says

But even without all the adverse market conditions, nano flats were never as popular as their developers made out. While they comprise only a small part of the residential portfolios of the big developers, Jiayuan’s exclusive focus on such tiny flats was doomed. They turned out to be based on a poor business model and even worse investments for aspiring homeowners.

This unhealthy trend, which hopefully is well in the past, caused the government in late 2021 to set a minimum size of 280 sq ft for new homes built on government land. At the time, officials were worried that the trend might start a race to the bottom among developers to build the smallest flats.

Of course, even without those shoeboxes, the city’s average home sizes are far from ideal. And while the government has made some headway in lifting housing supply, it is an uphill battle. Hong Kong people deserve a better quality of life, and that starts at home.