Rules will make flat pricing clearer

PUBLISHED : Saturday, 21 November, 2009, 12:00am
UPDATED : Saturday, 21 November, 2009, 12:00am

Home hunters will get a better idea of how much they are going to pay for the space they will actually live in under new measures to boost transparency of the sale of uncompleted flats.

Under the rules, to be in place by the end of the month, developers must state clearly the price per square foot or metre of saleable area on the price lists. Transaction records of individual flats, including price and purchase date, will also have to be made public within five working days after the sale is confirmed, instead of the current one month.

And after some developers were criticised for adding 'lucky' floor numbers such as 88 to buildings with only half that many storeys, floor numbering will also have to be made clear and shown in a more prominent spot on the sales brochures.

The measures apply to the sale of uncompleted flats - or those sold under the so-called consent scheme. Developers must comply with the conditions of the scheme when they put unfinished flats on sale. If they don't follow the rules, the Lands Department can withdraw its consent.

Hongkongers regularly buy flats before they are completed, with many deciding to go ahead after visiting 'show flats' and reading sales brochures.

In many cases, buyers may not know what common areas they are paying for. And common areas may differ from one development to another.

There have also been reports that some developers have charged buyers for 'green' features the government has exempted from a building's gross floor area to encourage more environmentally friendly designs. More green features has led to bigger common areas.

Some new flats have an efficiency rating as low as 68 per cent. The figure is determined by dividing the internal floor area by the gross floor area.

Outlining the measures yesterday, Chief Executive Donald Tsang Yam-kuen said the move was aimed at addressing concerns that flat buyers were being misled by confusing information. 'The government has asked the Real Estate Developers Association to implement three new measures by the end of the month to enhance the transparency of the sale of uncompleted units,' Tsang said.

At present, only the flat price, but not the price per square foot, is shown on the price lists. Media reports and advertisements often quote the per-square-foot price in terms of gross floor area.

Under the rules, developers will have to state a flat's price per square foot or metre in saleable area - basically the internal flat area plus the balcony. The rules will be imposed through revising the REDA's guidelines. Developers that do not comply will be dealt with by the association.