In a new housing project in Happy Valley, a traditional area with good schools, more than 90 percent of apartments offer a usable floor area of just 61 square feet. Yet, the developer of the project claimed it is “rare” and said it is not going to sell it but will hold it for leasing purposes.
Why is the developer so confident?
The answer has something to do with the fierce competition for places in top Hong Kong schools.
Sending their children to a prestigious primary or secondary school is a dream shared by many Hong Kong parents.
Hong Kong has a two-stage school allocation scheme — discretionary admission and computer-programmed central allocation.
Parents can apply to a government or aided school in or outside their school district in the discretionary stage and be offered a place based on a points system.
If they are unhappy with the result, they can go through the central allocation stage for a place within their school net.
In the central allocation stage, whether a child can get into his or her preferred school depends on academic performance and sheer luck.
The scheme appears to be relatively fair, except that Hong Kong has more than 30 primary school nets and nearly 20 secondary school nets.
Some of them, such as Happy Valley and Ho Man Tin have more top schools, which means children in these districts have a better chance of getting into good schools.
By contrast, those who live in the New Territories have far fewer chances since there are fewer good schools there.
To improve the odds, some parents would move to so-called “good” school district.
Due to historical reasons, districts with many good schools are typically more expensive.
Most families won’t be able to afford an apartment there.
Here is where the abovementioned mini flats have a niche.
The Happy Valley project is expected to charge a monthly rent of HK$10,000.
To give their children a better education, some parents would be willing to pay the price for a chance to “win” a place at a good school.
Ironically, as more such tiny flats get into the property market of downtown districts, competition for top schools will become even more severe.
But for the developers, the high rentals would generate excellent returns on their investment.
This article appeared in the Hong Kong Economic Journal on Oct. 25
Translation by Julie Zhu
[Chinese version 中文版]
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