Hong Kong could see an additional 4,000 apartments come on to the market as property developers have sought to build smaller-size units at some existing projects, the Hong Kong Economic Journal reported.
If the plans are cleared by the government, the number of housing units will increase by 61.2 percent compared to the original estimate, according to the report.
Sun Hung Kai Properties Ltd. (00016.HK) is the most active among the developers pursuing the initiative, the report said. The company has sought to subdivide four of its projects and boost the total number of units more than twofold, to about 3,971 units.
The average size of the units would be cut anywhere from 38.4 percent to 71 percent.
Meanwhile, its Kwu Tung project in Sheung Shui has sought to raise the plot ratio to 2.1 times from 0.4, taking the total unit volume to 1,147, up 11-fold, with an average size of 740 square feet. The original plan had been for a low-density residential project.
According to data at the Town Planning Board, at least six projects have sought to accommodate more smaller units that would raise the supply number to 10,800 from 6,699 units, equivalent to 57 percent of the targeted annual supply each year in the private housing market.
The projects include one by Henderson Land Development Co. Ltd. (00012.HK) in Yau Tong Bay that has proposed to significantly increase the number of units by more than 1,300, to a total of 6,556. The average unit size will be cut by over 20 percent from original 820 square feet.
Developers believe smaller units will better fit the needs of users at present in the market, surveyors said.
Charles Chan, managing director at Savills Valuation and Professional Services, said one reason why developers are eyeing smaller units is the higher stamp duties that larger apartments will entail. Lower stamp duties will reduce on the burden on buyers.
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