Flat buyers still have to beware
The abbreviation GFA signals buyer beware in the city's housing market. The use of gross floor area in advertising and marketing by developers and agents can inflate the quoted size of a flat by including communal areas such as staircases and lobbies. In some new estates, according to the consumer watchdog, this has accounted for as much as 32 per cent of the quoted size of a flat. The practice can leave buyers in the dark about how much living space they will get for their money.
Hopefully, legislation banning developers from using GFA for new flats will pass the Legislative Council before the end of the current session, although the industry has threatened a constitutional challenge on free-speech grounds.
Meanwhile, for existing flats, the Estate Agents Authority has ordered the city's property agents to use the 'saleable area' of a property, which includes balconies but excludes all common areas and bay windows, in all marketing from January 1. That means prospective buyers will soon know at a glance exactly how much personal living space they can expect and at what price.
Regrettably, the authority has not ruled out the continued use of GFA, so long as it appears in text no bigger than that used to show the saleable area. It is not surprising therefore that unlike developers, leading property agencies have no objections to the new rule.
Consumer advocates are disappointed that the authority has not set out a timetable to abolish the use of GFA by agents. Authority chairman William Leung Wing-cheung hopes 'saleable area' will eventually become standard, but says it is difficult to change the industry's habits and it depends on how quickly the public adopt the use of it.
That seems to reflect industry pressure more than the public interest. After all, the proposed ban on developers using GFA followed a year's work by a government-appointed committee on formulating legislation, and a two-month public consultation. It was driven by public opinion. Flats have become increasingly smaller and more expensive. Some developers have profited enormously from putting false information in sales brochures, using complicated formulas to calculate sizes and employing underhanded tactics to boost prices.
The legislation before lawmakers, which covers show flats, advertising and promotion, the definition of flat size and the release of data about prices and transactions, as well as providing for penalties of imprisonment and heavy fines for misleading statements, is long overdue.
It is a shame the ban on using GFA has not been mirrored in the new rules for second-hand flat sales. This has served to provide ammunition for developers, who claim it will cause confusion.