High land prices in densely populated Hong Kong have led property developers to go all out to maximise floor areas to get the best possible profit from each project. This numbers game has crept into marketing campaigns where flats are being sold to the extent that square footage, assumed by buyers to be living space, includes space between the apartment entrance and the lift, or even bay-window ledges and utility platforms.
Surveyors and other groups want legislation to impose a fair and transparent market, while developers want self-regulation. Meanwhile, bewildered homebuyers are getting fed up of being expected to approach deals with the maxim 'let the buyer beware' ringing around them when it comes to claims about measurements. More buyers are looking for big differences between the quoted floor area in sales brochures and the actual useable space in a flat.
The lack of a clear standard and legally binding formula in the calculation of gross floor area or saleable floor area is to blame. Over the past two decades, efficiency rates of new flats have become poorer - meaning the ratio of living space to gross floor area is lower. A ratio of 75 per cent is about what an average buyer will get for a new flat today, compared with an industry standard of 80 per cent or more in the 1980s and 1990s, and up to 90 per cent in the 1970s.
The decline of efficiency ratios is largely attributed to the flexibility of developers including more common and ancillary areas - from corridors to plant rooms, clubhouse, balconies and utility platforms - into the gross floor area and saleable floor area.
The Hong Kong Institute of Surveyors (HKIS) has issued a supplement to its code of practice for the calculation of saleable area. According to the institute's definition, the saleable area should not include items specified under ancillary accommodation such as cocklofts, bay windows, car parks, yards, terraces, gardens and roofs. But this is only a voluntary guideline and not binding for developers. Lawmakers and the Consumer Council have urged the government to step in with legislation or to standardise the definition of saleable area to prevent abuse of the system.
Midland Realty chief analyst Buggle Lau Ka-fai says homebuyers should inspect the show flats of a development to get a better understanding of the actual living space of the property they intend to purchase.