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Thursday, 21 March, 2013, 2:50am
Comparisons can solve gross problem
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Sun Hung Kai Properties' Riva development. Photo: May Tse
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!
This article first appeared in the South China Morning Post print edition on Mar 21, 2013 as Comparisons can solve gross problem
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Byebye Mar 21st 2013
6:36pm
6:36pm
Vampire Squids are darkening life in Hong Kong; in fact Hong Kong is ruled by Vampre Squids!
cleareye Mar 21st 2013
10:33am
10:33am
There is no silver bullet to counter against Hong Kong's well established fraternity of vampire squids. Salable area, or useable area is grey. A ladder-climbing manager can propose to include the area where the water and drainage pipes are installed to be considered part of the salable space as those are dedicated to an individual flat.
Where the property developers cannot capitalize on the sales price, they can perform their vampire deeds from management fees, as most of their subsidiaries are the estate management company by default.
In Discovery Bay, all residents are captive customers. The management company, owned by DBR, raises transportation fees every two years and the latest proposal at 9.5%. They claimed they loss $6 million for 2011-2012, which is inexplicable as they had only raise the fees in 2010. Moreover, the estimated return on the rate hike will result over $20 million in revenue against their cry about the $6 million deficit.
The story books should be re-written: vampires come from not Transylvania, but Hong Kong, and our government is their cliché hunch-backed assistant Igor.
Where the property developers cannot capitalize on the sales price, they can perform their vampire deeds from management fees, as most of their subsidiaries are the estate management company by default.
In Discovery Bay, all residents are captive customers. The management company, owned by DBR, raises transportation fees every two years and the latest proposal at 9.5%. They claimed they loss $6 million for 2011-2012, which is inexplicable as they had only raise the fees in 2010. Moreover, the estimated return on the rate hike will result over $20 million in revenue against their cry about the $6 million deficit.
The story books should be re-written: vampires come from not Transylvania, but Hong Kong, and our government is their cliché hunch-backed assistant Igor.
johnyuan Mar 21st 2013
6:41am
6:41am
Giving a false presentation in the amount of an area one actually is buying has been a long practice by property developers in Hong Kong. I suggest some academics might do a research on the cause and success of deceptionS as practiced in the property sector in Hong Kong. What comes to my mind is that the rule of law has not lead to a fairer or honest society. On the contrary rule of law can induce an over-relaxed sense that everyone is governed by it. Here, the property developers make their own rules and the government makes no law against them. I think it is finally through public opinion that is stopping the property developers and the government from fooling the people. It is so incredible too that people for two decades have had committed their largest investment to enrich those deceived them.
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