My Take

Comparisons can solve gross problem

PUBLISHED : Thursday, 21 March, 2013, 12:00am
UPDATED : Thursday, 21 March, 2013, 2:50am

How strange it is to find myself agreeing with those vampire squids from the Real Estate Developers Association.

REDA members have made the most outlandish profits by misleading and distorting the true sizes of flats people have bought over the decades, while the government looked on.

The association is still fighting attempts to make the sale of properties more transparent and fairer for buyers. Even so, it is right to argue that gross floor areas should also be included in sales brochures.

The Residential Properties (First-hand Sales) Ordinance will come into effect at the end of next month. Under the new law, developers and agents must use the new standard saleable area in the place of gross floor area. The latter is misleading because developers have for a long time included the property's common areas in the calculation, and every developer has their own method of calculations to rip off buyers.

Saleable area is more accurate because it specifically refers to the internal flat space, plus balconies - that is, the space you and your family actually live in. But since the law is not yet effective, agents and developers have been allowed to advertise both gross and saleable areas.

Some critics have complained this has caused confusion. Nonsense! Many buyers actually find it is more informative. The reason is simple. You have a rough idea of the discrepancy between the two areas. Generally, the bigger the common area, the less family space there is for you in your own flat. Don't get me wrong. The new law is long overdue and will shift the balance in favour of buyers. For one thing, developers will have to disclose anything that may "affect the enjoyment" of the property - like that garage dump next door. But some developers have found ways around that.

Taking a cue from financial services, Sun Hung Kai Properties has produced a three-volume, 1,500-page whopper as the new sales brochure for its Riva development in Yuen Long. That effectively guarantees few buyers will read the whole thing.

I can already see REDA's reaction when asked to provide summaries of key points in future projects. "Hey, the new law asks for all the information; here's all the info for you - straight from our lawyers!" Those vampire squids!