It is assumed that most of us who reside in Malaysia have the privilege to stay in houses measuring more than hundreds of square feet, blessed with sufficient living space to execute our daily live routines. This can be related to the ample land space our country has (approximately 127,000 square miles) for developers to build housing projects. Despite our large land banks however, property prices are soaring much to the dissatisfaction of property buyers.
Nevertheless, it is the assumption of many that Malaysians are making a mountain out of a molehill. Let us look at some of our less fortunate counterparts. The Hong Kong real estate situation is poles apart from Malaysia. Hong Kong has been facing severe population congestion problems for decades now. It has a land size of only 426 square miles, which is more than 4000 times smaller than Malaysia. With such a minute land size it holds a total of 7.2 million people, which is equivalent to almost a quarter of Malaysia’s 30 million human population; a country 4000 times smaller but housing ¼ the number of our country’s population.
The statistics are an indicator of the severity of land space and real estate supplies deficiency in Hong Kong, instigating sharp rises in property prices. Recent reports show that Hong Kong’s property prices hit a record high in May 2015, recording a 20% increase as compared to May 2014. This situation rendered many Hong Kongites incapable of buying or renting a home.
The majority of those who can buy a home in Hong Kong can only afford a studio unit of approximately 150 sf - 200 sf, as the price per square foot in Hong Kong is astounding with an average 500 square feet unit selling for approximately HKD10 million. In view of this phenomenon, Hong Kong developers are coming up with housing projects of smaller units to match lower price tags and the people’s affordability.
For those who are unable to afford a property, they can only resort to renting one. In many cases, some small families even have to live and run their daily routines in a room of just 20 sf - 30 sf, and they are forced to make do with the small compartment they call home.
The negative effects upon the people of Hong Kong due to soaring property prices are inconceivable. Adverse effects on those financially incapable are most profound because many of them can only afford to address a metal cage as their ‘home’, as they are unable to afford anything else. These so-called metal cages are named “caged homes” in Hong Kong.
Caged homes are usually located in old buildings of urban areas; spaces in the old buildings are measured and partitioned into numerous sections in order to make way for as many caged homes as possible where one is stacked on top of another. It is usually stacked together in two, measuring not more than 15 sf (6 feet x 2.5 feet) per cage. The rental for one caged home in the year 2010 was about USD150 per month, with the one situated below fetching a higher price. The current price is approximately USD200 per month. The rental for caged homes in Hong Kong generally do not include water and electricity fees, and tenants have to pay for utility bills on top of their rental. Tenants also have to share a common toilet with dozens of other residents, raising much concern on hygiene and quality of life. It is indeed a pathetic phenomenon for us to ponder upon.
Caged homes are actually approved by the Hong Kong government, so long as owners obtain the necessary permits prior to renting. With the permits obtained, owners can then convert their apartment or building space into caged homes to be rented out. From here, we can see that due to severe overpopulation and desperate financial situation, a new market of very low-end real estate has emerged, a market literally made of cages.
With regards to the above article, we can very much agree that living space does actually have a great impact on lifestyle and quality of life, and that as Malaysians, we should be grateful that although property prices in Malaysia may be on the high side, it is still very much better than the property prices in countries such as Hong Kong.
(Written by: Yau Yin Wey, 22 September 2015)