Plans for rules on 'saleable area'
The Estate Agents Authority (EAA) plans to issue a binding circular stipulating how property agents specify the 'saleable area' of second-hand residential properties.
Rosanna Ure Lui Hang-sai, EAA's chief executive, says no decision has yet been made on whether agents will be required to provide pertinent information on just the saleable area or in terms of the gross floor area.
The prevalent use of gross floor area in quoting the per-square-foot price of a property among agents has been criticised as being misleading, partly because the prices quoted are lower than those based solely on the saleable area.
In addition, gross floor area includes the common areas and corridors, while saleable area refers to the unit's floor area, utility platform and verandah.
Ure said a new practice circular on specifying the saleable area of secondary flats would not be an onerous burden on agents, adding she hoped it could be issued this year.
Property agents can be penalised for not adhering to the regulations issued in EAA circulars.
Last year, home transaction volumes in Hong Kong dived about 30 per cent, thanks to the government's cooling measures, such as an additional stamp duty and tougher mortgage conditions.
The number of people taking EAA examinations to become salespersons and real estate agents dipped about 2.2 per cent to 19,947 last year, from 20,387 in 2010.
Nevertheless, the number of real estate professionals surged to a record last year, up nearly 11 per cent from 2010 to 34,719 individual licensees.
But EAA chairwoman Vivien Chan expects that number to decline as many licenses would expire at year end and agents may not renew theirs.
The number of licensed property firms also hit a record of 2,734 as of December 31 last year, up from 2,426 in 2010.
Chan expects Europe's sovereign debt crisis and the mainland's cooling housing market to affect the local property market.
She said property prices should remain flat in the next six months.
Agents would face a 'painful process' as the market consolidates, Chan said, but adding the EAA would be unable to lower or exempt license fees.
Separately, the EAA revoked the licenses of nine agents last year, compared with none in the last two years.
A licensed agent could lose his or her license for violating certain regulations.
Or he or she could be regarded as being inappropriate license holders in the event of bankruptcy or becoming mentally ill.
The EAA received 590 complaints last year, down about 5 per cent from a year ago.
However, the number of inquiry hearings surged 48 per cent to 291 cases, covering issues such as agents providing wrong property information to clients or failing to conduct a land search.
The year a standardised definition of 'saleable area' was adopted for sale of uncompleted residential units