What Melbourne and Hong Kong have in common: shoe box apartments

By Leith van Onselen

South China Morning Post’s Yonden Lhatoo has clearly had enough of the shoebox apartments being constructed around Hong Kong, penning the following rant:

Emperor International Holdings has entered the hall of shame for heartless developers putting profit before people, with plans to build the tiniest homes in the city. With these 61.4 sq ft shoeboxes being mismarketed as homes for humans, can we sink any lower in dehumanising the population of one of the most prosperous cities in the world?

Even Stanley Prison offers more living space for criminals, with the standard jail cell measuring a relatively luxurious 80.7 sq ft. The only thing left now is to put us all in coffins and be done with it…

There is enough land and wealth in Hong Kong to house every citizen in relative comfort and dignity. What there is an acute dearth of is the guts, political will and generosity to achieve it.

People get emotional about killer whales in captivity, and how confining them in their marine park tanks is the equivalent of keeping a human in a bath tub all his or her life. Boredom, depression and frustration lead to self-harm and aggression.

Hello? That ring a bell, humans in Hong Kong?

That’s pretty disgusting. 61.4 sq ft is the equivalent of a small single bedroom – and that needs to fit a toilet, shower, kitchen, bed and living area.

Things are a better in Melbourne of course, but not by much. The below table from The AFR shows the average price and size of apartments being built across various parts of the city:

ScreenHunter_13352 Jun. 06 09.46

As you can see, apartments in the CBD are being priced at more than $10,000 per square metre, with surrounding areas only slightly below this level.

The average price of a small one-bedroom apartment of around 50 sqm ranges from $410,000 to $506,000, which rises to more than $580,000 for a two-bedroom apartment and $800,000 or more for a three-bedroom apartment.

Unlike Hong Kong Melbourne is not short of space. So why is it building a whole bunch of expensive shoe boxes in the sky that are marketed for quick profit to investors (both domestic and foreign) rather than building stock suitable for resident families?

The underlying answer, of course, is that Melbourne’s economy has become so fundamentally dependent on never-ending population growth (immigration) to pump demand and fuel the economy (e.g. via apartment construction) that it has forgotten about improving the living standards of the existing population.

Melbourne’s housing system is failing. But at least we are better than Hong Kong!

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Unconventional Economist
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      • Hong Kong is actually pursuing this strategy harder than Australia, but as the people of Hong Kong have gone on a breeding strike, its effectiveness has been reduced somewhat.

      • When you say “the people of Hong Kong have gone on a breeding strike” did you actually mean to say there were 59,900 births in Hong Kong last year?

      • If the aim is to reduce the population, Japan’s baby strike, less severe than the one in Hong Kong, is obviously effective.

        Perhaps on Hong Kong I had it the wrong way around, though – perhaps Hong Kong’s administrators have defeated (for the time being) its people’s baby strike by bringing in migrants (strike breakers) from the mainland at around three times natural increase.

        Altogether now – ‘SCABS!’

      • If the aim is to reduce the population, Hong Kong’s “breeding strike” failed dismally

      • Well, hasn’t worked *yet*. Certainly there’s no way annual births of 50k can sustain a population of 7 million without a life expectancy of less than 140 or very strong immigration.

        OTOH, if the aim was just to slow population growth, the job well and truly already done.

      • That’s the one – the one where 2.5 million Hong Kongers who could’ve bred didn’t aka the one where if their birth rate was the same as Australia’s, their population growth would have been 60% greater.

      • Yep – where 2.5 million people have chosen to replace themselves with roughly half that number of children .

      • That’s the problem with hyperbole, it sounds so clever when you say it but so stupid when you unpack it

      • Where’s the hyperbole?

        Each generation in Hong Kong is half the sixe of the last. Aside from tempo effects they have no population pressure.
        The more you unpack it, the less justified by the actual rapidly decliniing population growth these 2m x 3m units in Hong Kong become.

  1. TailorTrashMEMBER

    “There is enough land and wealth in Hong Kong to house every citizen in relative comfort and dignity. “…….read SydMelb too ……..but not if your Primeminister and treasurer are real estate agents supreme and their developer mates are only catering for foreign non citazen demand …….and local investors ………homes be damned …

    • That’s the fundamental mistake, those apartment are not built to house anyone. It’s built to part the stupid investors with their money.

      • But be warned by HK: the establishment has no conscience at all about those living conditions being the only option for your descendants….

        Land rent is elastically correlated to the density you are enabled to cram people in at.

        It is a lie from the urban planning profession, that density is a factor enabling affordabliity.

        There are plenty of median-multiple 3 cities with 1500 people or less, per square km.

        Hong Kong has 26,000 people per square km and a median multiple of 16+

        Not only is the economic rent in a given patch of land higher to the extent that there are 20 times as many people on it, the gouge FROM EACH of those people is steeper. The greater the cram, the steeper the per-person gouge, there is no mitigation, contrary to the urban planners lies.

      • Utterly frustrating how correct Kevin is. These apartments were never ever build by people even considering living in them. They were built by people, hoping to flip them to local or foreign investors for fast cash. Those who purchased them ALSO generally never ever had intention to live in them. They literally look at them like some kind of spreadsheet – boxes ticked, cost is X profit is Y, tax is Z, negative gearing is B etc – it’s all just numbers, there’s absoloutely no concept a human will live in them.

        FURTHER to Kevins point the BUILDERS don’t care, they are getting work, the SUPPLIERS don’t care, they are shifting materials, the INSPECTORS don’t care, they are getting paid. No one in this fucking chain gives a damn.

        FURTHER AGAIN to this god damn point, not only are this shitbox little places being built, purely to extract money from Chinese investors (generally) they are costing Aussies because they are on prime land, where instead of shovelling up 30 good apartments they shovelld up 50 to 60 shit ones, so that land is now off the market. That builder is engaged building a shitbox for an investor, building costs go up because of the high demand, the supplier is selling a lot of materials so that goes up.
        ON TOP OF ALL OF THISSSSSSSSSSSS many of the Chinese purchased ones are never rented out!

        So we’re multiple dipping against the little guy here, we’re making things cost more, not introducing more housing stock for people to rent from, IF they ever go on the market for ‘normal’ people they will suck (but they’ll be all the middle class can afford)
        Conclusion, living standards are going to drop – anyone in an older larger apartment (me) be prepared for rent hikes in 5 years as people realise the ‘norm’ is a tiny shoebox.

        This whole thing is a joke. It’s a disgrace. The population ponzi needs to stop and ANYONE (I mean anyone) will get my vote for it. Anyone contesting negative gearing, has my vote, period. I don’t care if it’s Kim Jong Adolf Hanson,… enough is enough.

  2. 61.4ft is around 19m squared by the way, hilarious… Basically a master bedroom with an ensuite.

      • Yeah. When I did maths at uni, 8 x 8 came out to 64. So 61.4 sq feet is less than 8 x 8 feet. So this is about 2.5 x 2.5m, or 6.25 sq m. It’s not the size of a master bedroom plus ensuite, it’s the size of a bed.


  3. Melbourne’s housing system is failing. But at least we are better than Hong Kong!

    Hong Kong’s population is growing far more slowly than Melbourne’s and will peak at least somewhat sooner, though. At the same time it is interesting to see that in the sense that are much larger proportion of their population growth is due to immigration, they are actually more dependent on the migration population ponzi than Australia.

    • Is no-one being “forced into less adequate housing” by a racket in urban land? So the residents of Hong Kong, median multiple 16, “choose” those tiny apartments and would not bother to choose housing like the residents of Atlanta, median multiple 3, average section size 1/2 an acre?

    • When I was looking at buying, most new suburbs (ie entry points for us millenials foregoing our smashed avocado) were built by developers who then sold. The developer would set up a body corporate/hoa and get out of there. There was often a lot of rules about what you could and couldn’t do with the house. Often the tv and telephony infrastructure was put in as a bulk deal, so you had to use a provider that was available on that system (no Telstra).

      Buying a single block of land was pretty hard to do.
      So yeh, sometimes buyers aren’t forced into purchasing a tiny block size, but sometimes that is all that is available.

    • Good comment!!

      In most cases where you have a bad outcome or a collapsing society, it usually is the victims that are the blame. Despite the best efforts of the elites to improve the lot of the great unwashed, they insist on bringing ruin down upon themselves. Dirty, lazy and full of bad habits they insist on shooting themselves in the foot. For example, look at Credit Cards in Australia. No one is forcing the deplorables to sign up for 21% credit cards – but they go after them like flies to shit. The banks want to introduce 5% Credit Cards – but there is so much demand for the 21% product that they just can’t see a market.

      Look, if anyone wants a bigger house or a unit with bedrooms then they shouldn’t have made the personal choice to be poor. They chose to be poor, so its their own fault.

  4. “Things are a better in Melbourne of course, but not by much”

    61.4 sq ft is 5.7 sq m.

    The smallest apartment in your table is 49 sq m.

    Things are much better in Melbourne.

  5. Lil bewdies! Smaller the better, nice to be able to hear the neighbours’ happenings! Young ppl these days don’t want dem fancy houses with privacy and backyards, it’s a revealed preferences I tells ya. Nice and close to the CBD so they can eat their avo smashes and flop home after a night of espresso martinis!

  6. And we have High Rise Harry in part to thank for that because the banks used to not lend for apartments below a certain size and he stared them down by building smaller apartments and then daring the banks not to lend for them.

  7. They don’t put up with this developing nation crap in crowded Singapore. Why are we such soft cocks?

  8. Looking at the Melbourne table, the three-bedders are all well over $1M. Only in North Melbourne are they under $1M. And an average 3 bed apartment in Melbourne is roughly the same size as a two-bed apartment in Sydney. In any case they are out of reach for most families.

    We hear about the glut in dogboxes in the city, Docklands and Southbank, but they still seem to be hugely overpriced. Eventually these prices will drop as they become the new slums but these prices have a hell of a way to fall.

    • md as slums those dogboxes have to be cheap to ‘operate, maintain etc’ however at 40 levels they are never going to be cheap, more likely knockdowns in time.

      What is the weekly cost of upkeep, on highrise flats? 250 dollars???

  9. Ahhhh… sigh….

    Currently working after an 8 year hiatus from the construction game on said high density Brisbane riverside site…. ahem… the whole area is bonkers with converting old industrial or light industrial – previous residential [50s – 60s] into inter city urban dwelling space…. you people have zero clue….

    Disheveled Marsupial….. its like Donald Trump cloned himself in the 70s and went global…..

    • TailorTrashMEMBER

      Nice one skip …it’s great that you are getting some benefit from high density Brisbane …….good for you …………..but translate for us lesser gifted individuals who have zero clue ? …Donald ..seventies ? ……What’s the connection ……

    • Interim housing for the invading (friendly of course) forces. After the new government is ‘inducted’ there will be a housing swap between the victors and the vanquished.

  10. 6 or 7 sq m per tenant is about the average for over 2.4 million migrant guestworkers here on pretext visa alibis – so much the same here.

    Average 60 sq m old ex Australian unit converses by the foreign crime syndicate or proxy into migrant hostel bunk & matress share will usually have one or two nominal tenants ( for fake negative gearing) then 6 or more sublet cash in hand renters.
    So say a 60 sq m old 2 bed unit and 8 average tenants 4 in bunks in each room plus whatever in the lounge = 7.5 sq m each.