Surveyors and property agents want 'saleable area' defined The government is facing mounting pressure from property industry participants to enact legislation so developers will use saleable area instead of gross floor area as the basis for calculating flat prices. The surveyors and property agents are also calling for a standard definition of what constitutes a saleable area to give a clear picture on the actual useable size of the flats home buyers own. 'Hong Kong is probably the only place in the world that includes common areas such as clubhouses and corridors in residential sales, said Raymond Chan Yuk-ming, president of the Hong Kong Institution of Surveyors. Earlier this month, Permanent Secretary for Housing, Planning and Lands Thomas Chan Chun-yuen told legislators that the government had no plans to legislate on the matter, saying that self-regulation of the industry had been effective. Pressure on determining the calculation method came after a flood of complaints about dubious sales practices by developers and long-term confusion about what constitutes the size of a flat. Some developers cite gross floor area, which the government defines as all covered areas including common areas such as corridors and lobbies and the thickness of walls. Others interpret saleable area as also including a share of external facilities such as gardens and car parks. Industry experts said it was difficult for potential buyers to compare the unit rate of flats among new residential projects if developers adopted different methods for calculating flat prices. To ensure consistency, the surveyors institution has reviewed the existing Code of Measuring Practice. It recommends that saleable area comprise the covered floor areas and those floor areas that are less efficient. This latter floor area includes cocklofts, bay windows, yards/terraces/gardens/flat roofs/car parks, car parking spaces and plant rooms, excluding common areas, and should not equal the sale unit's size. To avoid confusion and ensure consistency, the institution has also proposed that only the phrase 'Saleable Area' and its Chinese equivalent be used to describe a property. The institution is in talks with the Real Estate Developers Association of Hong Kong on how to introduce the new practice. Mr Raymond Chan hopes the talks will be finished in the next two months. Alnwick Chan Chi-hing, an executive director at Knight Frank, said: 'The new practice has clarified the definition of saleable area. It could help potential buyers to calculate flat prices based on the same level, allowing them to finally compare apples to apples.' However, some surveyors said the new practice might not be forceful enough to ensure developers disclose an accurate picture of their construction information. One surveyor said the institution had not asked developers to use saleable area to replace gross floor area in the calculation of flat prices. 'The government should force developers to release the unit rate in terms of saleable area,' he said. 'The question is, is the government willing to sacrifice part of the lands revenue? The developer may not pay aggressive prices to buy development sites if they can't increase their sales revenue through selling common areas and saleable areas at the same prices,' he added. As the developers reveal gross area only in their price lists, property agents said that most of the potential buyers would not calculate flat prices in terms of saleable area. Mr Alnwick Chan said: 'We should educate the public that they should compare flat prices in terms of saleable area rather than gross area.'