Demand grows for Asia's shrinking apartments
Micro apartments have become a feature of Asia?s booming residential property market as people choose to be close to the buzz of central city living.
In Hong Kong they’re known as ‘mosquito units’, in Bangkok they’re called ‘micro dwellings’, while in Singapore they’re simply referred to as ‘shoeboxes'.
Although micro apartments may be known by a variety of nicknames, these units have become a central feature of Asia’s booming residential property market. Hong Kong, for example, has seen some of the smallest private flats in its history come onto the market in recent years, with properties of just 128 square feet changing hands.
India is experiencing a similar trend, with JLL research showing that flats in major cities such as Mumbai and Bengaluru have shrunk in size by up to 26 percent between 2010 and 2015. And it’s also a familiar story in Japan, Australia, Thailand, Philippines, and beyond as land becomes more scarce and more expensive and home buyers become more cash strapped.
An increasing number of developers are therefore pursuing a strategy of constructing smaller apartments but at the same price per square foot and without compromising on the quality of the property. Although this is doing little to ease property price inflation, it is providing access to the housing ladder at a more affordable price point, albeit with ever smaller floor spaces.
“Builders are exploring innovative ways to make residential housing across major cities more appealing to potential buyers at a time when it is increasingly becoming difficult to sell expensive apartments,” says Anuj Puri, Chairman and Country Head at JLL India. “While property prices are not purely a product of developer’s discretion, the decision to alter apartment sizes as per the needs and spending power of buyers is definitely within their ambit.”
Cozy in crowded cities
This new breed of micro-apartment might be cozy, but they’re also heralding a new wave of sustainable property development in increasingly crowded and polluted cities. By their very nature, smaller apartments use less concrete, less steel, and less resources. They’re cheaper to heat, tend to have less appliances, and use less water.
As Matthew Clifford, JLL’s Head of Energy and Sustainability Services for North Asia, says: “Sustainable housing today comes down to building smaller spaces for one individual which use less materials and have more shared resources. Buyers are increasingly price sensitive across the region, but sustainability can be a key driver in their decision making process.”
Condensing more units into the same site also attracts other economies of scale and efficiencies which not only help to keep costs low, but also ensure housing stock is maximized. Recent examples of modular constructionfrom New York – where apartments are pre-fabricated offsite and then stacked at the building site – have been a huge success, particularly among Millennials.
This trend may be a sign of things to come in Asia, particularly in highly urbanized cities. Tassamon Vessuwat, Research Analyst at JLL Thailand, points out that micro-dwellings are an increasingly popular choice for young urbanites in Bangkok. “Lifestyle preferences amongst the Bangkok metropolitan region’s 15 plus million people have rapidly changed in recent years. More young adults, including singles and couples, seek to live independently, creating demand for smaller living spaces,” she says.
How small is too small?
While smaller apartments have the potential to answer many challenges faced by Asia’s growing cities, they still have to remain livable. Governments are increasingly worried that if left unchecked, developers could continue packing more people into smaller apartments, potentially sacrificing safety for sales.
In Bangkok, where the minimum legal size for a condominium unit is 21 square meters, the average condominium unit size in the city has been steadily declining,” says Vessuwat. However, developers have only recently begun to approach the legal minimum.
Meanwhile Singapore recognized this challenge in 2012, and quickly moved to limit the amount of “shoebox” apartment that were being built. Similar plans have been unveiled by state governments in Australia, with New South Wales in particular, introducing new planning legislation that mandated minimum apartment sizes. Hong Kong is also examining proposals to formulate a standard for living space per person for public rentals.
But despite these measures, small apartments will remain very much part of the urban landscape in Asia as much down to affordability as sustainability. More units in a residential block are likely to encourage the development of more services and amenities, bringing a higher level of shared facilities than in the past. What apartments lack in space they can make up for being part of an urban community and close to the buzz of city living.