The T Plus property development project in Hong Kong’s Tuen Mun district is said to have almost sold out all the units on offer last weekend after drawing several thousand cheques from prospective homebuyers.
The smallest apartment only has an area of 128 square feet. The project was not popular at all when it was first launched last year, but now it’s selling like hot cakes.
Interestingly, Louisa Mak Ming-sze, Miss Hong Kong pageant winner in 2015, was spotted in the queue at the sales office on Sunday, along with her family.
There is talk that Mak’s family has bought three units in all.
Mak’s father is a deputy principal of a local secondary school. His monthly salary may be somewhere between HK$82,000 and HK$93,000, going by the pay scale in the sector.
Mak’s mother is a registered occupational therapist and her elder brother is a young doctor in Tuen Mun Hospital.
This is a perfect upper middle-class family from the eyes of most people. So why would they be interested in buying these nano flats that are supposed to be targeting low-income households?
I guess this not only reflects the crazy home prices in Hong Kong, it also shows how well-intended tightening measures have made it more difficult for buyers.
Suppose Mak’s father already owned a property, to buy a second home, he would need to pay 15 percent stamp duty. Nearing his retirement age, getting a mortgage would be difficult.
Mak, despite being a Cambridge law graduate and TVB actress, lacks stable income and may not easily convince banks to lend her money.
Mak’s older brother is now working at Tuen Mun Hospital after graduating from university. His salary may be sufficient to pay monthly mortgage loan, but he may not have enough savings for the installment if he chooses to buy a bigger flat, which comes with a much lower loan to value ratio under the current rule set by Hong Kong Monetary Authority.
This explains why instead of buying a bigger unit, the family is buying three mini flats, which they can most likely finance 90 percent of the purchase cost with loans, and benefit from the first-time homebuyers’ extra stamp duty waiver to the full.
The experience of the Mak family demonstrates that housing prices in Hong Kong are beyond the reach of the vast majority in the city.
Things may not change anytime soon because the decade-long housing market boom may simply keep rolling with the rising demand from a growing population, and limited supply.
This article appeared in the Hong Kong Economic Journal on June 16
Translation by Julie Zhu with additional reporting
[Chinese version 中文版]
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