The Hong Kong government’s new rules that require real estate agents to list properties by apartment size not including shared space will help raise transparency for the industry, according to property broker AG Wilkinson.
Starting on Jan. 1, real estate agents are required to show potential buyers net areas of the properties they market, after complaints from consumer groups that past rules allowing them to use only gross floor areas, which include shared areas such as lobbies, have misled buyers, according to documents on the Estate Agents Authority Web site. The city’s government has in the past year introduced measures including tightening mortgage lending and imposing extra taxes to curb home prices, which are now the world’s highest.
“This will unify industry standard and raise transparency,” said Ringo Lam, a director of valuation at Hong Kong-based AG Wilkinson. “In the past there were agents who deliberately used this loophole to mislead buyers. Hopefully this can help rectify that.”
The difference between gross and net areas can be more than 30 percent at some residential projects in the city, according to Lam.
Hong Kong’s home prices have doubled in the past four years on near record low mortgage rates, an influx of buyers from other parts of China and a lack of new housing supply.