Saleable floor area property rule perplexes public

PUBLISHED : Wednesday, 02 January, 2013, 12:00am
UPDATED : Wednesday, 02 January, 2013, 10:30am

A new rule forcing property agents to reveal the saleable floor area of flats on the secondary market is leaving home seekers and sellers confused - despite them appreciating the extra information.

"The new requirement is good because you can have a better estimate of how big a flat will be, as developers may have inflated their products, which may have a very low efficiency rate," homeowner Max Wong, 50, said.

"But I need some time to get familiar with the new system."

To make the residential market fairer, the Estate Agents Authority now requires property agents to state, and give at least equal prominence to, the saleable area, as well as displaying the gross floor area on all promotional materials.

The saleable area is the actual size of a home, including balconies. Gross floor area includes the saleable area plus a share of the common areas, bay windows and facilities.

While the saleable area gives property buyers a more accurate idea of a property, many buyers and renters are struggling to adapt to taking the new figure into account.

Wong said: "I know the average price of flats in terms of gross floor area at the housing estate I am living in, but not in terms of saleable area.

"I can hardly tell whether my flat has become more expensive or cheaper if you give me only the price in saleable area."

For example, if an owner is asking for HK$7.28 million for a flat at Grand Promenade in Sai Wan Ho, the per square foot price in terms of gross floor area is only HK$10,785.

But its average price in terms of saleable area is about 36 per cent higher, at HK$14,618.

A home seeker who was checking property prices outside an agency in Quarry Bay yesterday found the way the new information had been presented was unhelpful. "For instance, this agency stated that a 474 sq ft unit at Nan Fung Sun Chuen has a saleable area of 390 sq ft," said the woman, 31, pointing to an advertisement.

"I know that the selling price of such flats in terms of gross floor area should be around HK$10,000 per sq ft now," she said.

"However, on this flyer there is a price tag of HK$14,000, but it does not state whether it is the monthly rent or the price of the saleable area. It's quite confusing."

Patrick Au Man-ho, an assistant district manager at Ricacorp Properties, said the company had not encountered any problems with the new rule, as the agency started displaying the saleable area information on its literature at least a month ago.

"Though the public may need some time to get used to the extra information, it is fairer to buyers now," Au said.

Agents found to have violated the rule may be subject to a maximum fine of HK$300,000 and have their licence revoked.