One widely circulated joke on China’s internet goes like this: a man says to his girlfriend, “Once home prices fall, I will buy a house and marry you.” Instantly, her heart breaks because she knows they will never be together.
With home prices in many Chinese cities continuing to climb – over the week-long National Day vacation, four more local governments released new restrictions on property purchases to combat speculative buying – some developers are releasing more affordable options for anxious homebuyers desperate to get on the property ladder.
Take one new development in Shenzhen. Located at the heart of the southern metropolis – where home prices rose a heady 36.8% in August compared with a year ago – each unit is priced at only Rmb880,000 ($132,000).
A new home in Shenzhen’s buzzing residential market for less than Rmb1 million sounds too good to be true. The truth is the apartment only comes with 6 square metres of living space, or barely the size of a carparking lot. The building was refurbished from a four-star hotel built in 2004 and each room comes with a bed that can be folded into the closet to make space. There isn’t even the space for a separate bathroom and a kitchen so they are combined into one.
Despite this less-than-hygienic setup, the “pigeon coop” apartments – as they have been dubbed with some justification by the local media – sold out within hours. (In case you wondered, the building’s official Chinese name translates as “The City of Overseas Chinese Luxury Development”.)
The frenzy, however, has caught the attention of the Shenzhen government which on Sunday issued a statement saying that it is now investigating the case. According to national regulations, residential apartments should not be smaller than 22 square metres. The local government also said the agents had sold the apartments illegally and the hotel was built without planning permission.
Still, the popularity of the tiny flats reveals that some buyers are so desperate they would do anything to own a home.
“These days in Shenzhen, it takes a minimum of Rmb3 million just to buy an apartment. For those who don’t have Rmb1 million for a downpayment, the only way to realise their ‘housing dream’ is to live outside of the city. Alternatively, you can buy a very tiny flat. “For a lot of the young working class, that is their only hope to get on the property ladder,” says Securities Times.
Across the border in Hong Kong the city’s developers long ago mastered the art of offering micro-apartments. And these so-called “mosquito flats” are perfectly legal.
Take One Prestige. At 163 square feet a unit the development is the tiniest available on Hong Kong Island. The apartments – being sold by Henderson Land – have been going for a price per square foot as high as HK$23,000 ($3,200). Within this somewhat confined space a One Prestige flat offers a bathroom and an open kitchen, plus room for a bed.
The market demand for tiny studios is “very strong,” claimed a Henderson Land spokesperson. So strong, in fact, that the developer recently released another residential project with units of around 160 square feet of living space.
As it turns out, it was Hong Kong’s savviest tycoon Li Ka-shing who first sold these micro-flats. In 2014, Li’s Cheung Kong released the Mont Vert project. At 180 square foot each apartment was priced at around HK$2 million. At the time it was so small the South China Morning Post described a unit as barely bigger than a prison cell. However, it’s looking pretty roomy compared with what has followed…
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