Many Hong Kong homebuyers are not getting what they think they are paying for, but a new law to come into effect next year may force developers to become more transparent about the true size of the new flats they put up for sale.
However, that will leave secondary market sales open to continued misinformation about the actual usable area of flats, say critics, who believe the provisions of the new law should be extended to such sales as well.
Leland Sun, managing director of Hong Kong-based mortgage financier Pan Asian Mortgage, believes the new law will promote greater transparency, but urged the government to extend its provisions to the secondary home market, as well as to the sale of commercial, retail, and industrial properties.
A recent case that has attracted controversy in the market is Crown by the Sea, a new development by Cheung Kong in Tuen Mun, in which a flat offered last year by the developer as having a gross floor area of 1,514 square feet had an internal usable floor area of just 1,078 square feet - 71 per cent of the gross floor area stated on the company's price list.
The gross floor area included 310 square feet of common areas allocated to the flat (according to the project's price list this includes lift lobbies, lift shafts, electricity-meter rooms, refuse rooms, and a pro rata allocation of clubhouse areas); and an 80 sq ft bay window space. But a buyer would have to search through small print of the marketing brochure to calculate the flat's actual usable floor area.
Despite their reputation as being savvy buyers, Hong Kong homebuyers seldom examine the fine print or do the calculations to work out what is the real price per square foot of usable space in an flat.