Housing size and housing market dynamics: The case of micro-flats in Hong Kong

Abstract

Although housing sizes in Hong Kong have typically been smaller than those in other places, micro-flats of less than 40 square metres have become more prevalent in recent years. Many of these micro-flats have been built in the main urban area, although some are found in suburban areas as well. This paper explores possible factors behind the growth of micro-flats, including demographic trends, affordability problems and government land sale policies. Furthermore, micro-flats may not necessarily be perceived as problematic by actual users, since small housing size might be compensated by other factors such as affordability and proximity to amenities. Thus, the study also involved survey interviews with residents of recently completed micro-flats, to investigate their socio-economic background and their perceptions of living space. The findings reveal that per capita living space of micro-flat residents is indeed low, especially for larger households with three or more people. Furthermore, half of the respondents in suburban micro-flats are homeowners, reflecting the strong pull of homeownership versus private renting. The findings point towards the merits of facilitating supply of suburban micro-flats through land sale policies, to provide more affordable options for households less inclined towards long-term renting.