Developers' inflation of luxury home sizes probed
The government is examining why developers of two luxury residential projects in Sai Kung have included areas like covered parking spaces when calculating home size, when these areas were excluded from their calculations during previous sales.
The Housing, Planning and Lands Bureau said the matter was under investigation.
As the South China Morning Post's Property section reported last week, the quoted gross floor area of homes in Portofino, built by Cheung Kong (Holdings), was 1,400 sq ft more than when similar homes were offered for sale six years earlier.
At The Giverny, jointly developed by Wing Tai Asia and Nan Fung Development, the gross floor area quoted for homes on sale in April was as much 600 sq ft higher than for similar homes sold in 2005.
The findings prompted renewed calls for the government to take control of the largely unregulated world of property sales.
There is a commonly agreed definition on saleable area, but no law governing how to calculate gross floor area. Developers always refer to gross floor area when calculating sale prices, a practice which allows them to include common and ancillary areas.
The practice is the subject of growing complaints from consumers angry that new properties have poor efficiency rates, meaning the ratio of living space to gross floor area is low.
Since 2003, developers have included features like balconies in property sales, but now developers are beginning to include car ports in their floor calculations.
So far, the government has insisted on self-regulation.
The Hong Kong Institute of Surveyors is reviewing the definition of gross floor area now an examination of how saleable area is defined has been completed.
It has been calling on developers to use the saleable area when they quote prices.
But the Real Estate Developers Association said it needed to have consensus among members before action would be taken.
The association has not replied to questions about whether it will follow up the Post's report on the projects.
Democratic Party legislator Lee Wing-tat, who chairs the Legislative Council housing panel, said: 'The government should accept the fact that self-regulation doesn't work.
'The Real Estate Developers Association is hopeless.
'Regulation is urgently needed to protect consumers.'
He said the panel would discuss the two cases at a meeting next month.
On the Portofino low-rise development, the gross area of house No136 had increased by 42.25 per cent to 5,003 sq ft in sales brochures issued in 2005, from the 3,517 sq ft in 1999 during its launch.
In its 2005 sales brochure, the developer replaced the saleable area by only publishing the gross floor area.
The property eventually sold for HK$35 million, or HK$6,995 per sq ft.
Cheung Kong said the company had followed sales guidelines for unfinished properties by releasing the saleable area when the project was launched in 1999.
When it was completed in 2005, the company gave a clearer picture of the project by releasing the gross area, it said.
Wing Tai Asia said it had followed market practices and adhered to government requirements, with a clear breakdown provided.
