I have came upon an article that has become controversial in the housing markets of Hong Kong as the government plans to change it’s policy in managing the real estate industry.
For years, the value of apartments has been measured by calculating the gross floor area. If apartments are larger, they have a higher value, and so many property developers try to provide as much area as possible in order to earn more profit. But this has resulted in a poor efficiency rate of the property. For example, there may be long narrow corridors at the side of a room, which has little to no apparent use but to boost the gross floor area.
Starting from May, real estate agents will be required to use a new measurement for housing by indicating the saleable area. This aims to provide better transparency for potential buyers when choosing apartments, as they will be able to identify the actual amount of usable area in their potential purchase. There have been complaints however of existing property owners losing out from this new policy, as apartments regarded as 600ft would be reduced to just 400ft, and thus be deemed less valuable.
I believe that it is the right decision to implement the policy of using saleable area in the housing market, because property developers have unethically took advantage of vague area calculations to boost the value of their apartments. With this new policy, property developers may be encouraged to develop more efficient apartments that focus on saleable area, thus becoming more socially responsible and reputable. Buyers also benefit, as they get more value for their money. In fact, should all housing across the world use saleable area as the standard of measurement to mitigate such misleading behaviour?
