Hong Kong’s incredible shrinking flats revealed
Olga Wong and Joyce Ng
SCMP Sep 27, 2009
Buyers of flats in Hong Kong are getting less and less for their money as common areas included in the floor area quoted by developers eat into their living space.
Because of this practice – described by the head of a leading property agency as a “trick” to lower flats’ price per square foot – their actual size has shrunk by as much as 22 per cent since the 1980s. For example, a new flat listed as being 700 sq ft has only as much space as a 530 sq ft flat built in the 1980s.
In many cases buyers do not know what common areas they are paying for. While price lists and sales brochures list lift lobbies and clubhouses as examples of common areas, others are never disclosed. They include architectural features, planters, space for watchmen, rooftops, pathways to car parks and covered walkways, say architects and surveyors who have worked in the field for more than 20 years.
Some developers are even charging buyers for “green” features the government has exempted from a building’s gross floor area in an effort to make developments more environment-friendly.
The efficiency rate of new flats – gross floor area divided by internal floor area – is as low as 68 per cent.
Shih Wing-ching, chairman of property agency Centaline Holdings, described the practice as a developers’ trick to lower the apparent price of the flat.
“The larger the flat’s size, the lower the per-square-foot price,” he said.
Consumer Council chief executive Connie Lau Yin-hing said it was time to tell consumers exactly what they were buying.
“After all, buyers expect to pay only for what they can enjoy, and they need to pay for the maintenance of the common areas too,” Lau said.
The Sunday Morning Post commissioned a study of the efficiency rates of 23 housing estates built since 1980. The estates covered were built by several big developers, and include the city’s 10 biggest residential developments.
Data collected from developers, banks and the Rating and Valuation Department show the efficiency rates of estates built in the 1980s – including Taikoo Shing in Eastern district, and Whampoa Garden and Telford Garden in Kowloon – are as high as 90 per cent, meaning a flat’s internal floor area is 90 per cent of its gross floor area. (Gross floor area – a flat’s interior plus an apportioned share of common areas – is crucial because developers and buyers alike base their calculation of a flat’s price per square foot on it.)
The efficiency rate began to drop in the 1990s, when it fell to around 80 per cent, and the trend has continued. Flats built in the past 10 years are only 70 to 75 per cent efficient. The rate is even lower on some of the newest estates. At Victoria Towers in Tsim Sha Tsui, developed by Cheung Kong (Holdings), the rate is as low as 68 per cent; at Island Resort in Chai Wan, developed by Sino Land, it is as low as 69 per cent.
Using the latest definition for saleable area endorsed by the government, the efficiency rates of estates sold this year are just above 70 per cent.
It ranges from 71 per cent to 73 per cent for the flats of Silver Lake at Wu Kai Sha, in the northeastern New Territories; at Le Prestige in Lohas Park, part of the new town of Tseung Kwan O, the rate is 75 per cent. If balconies and utility platforms are taken out of the calculations, the efficiency rates at these estates are between 68 per cent and 72 per cent.
While the government has endorsed guidelines issued by the Real Estate Developers Association concerning the definition of a home’s saleable area, no attempt has been made to standardise the meaning of gross floor area.
The government and the association admit there is no standardised definition of gross floor area, meaning developers are free to include whatever they want in a building’s common area. Although developers are now required to inform buyers about the amount of common area included in a flat’s gross floor area, they are not required to provide an exhaustive list of the common area’s constituent parts.
Common areas account for as much as 22 per cent of gross floor area in newly completed estates, our research shows.
“Having controlled the saleable area, it’s time for the next step,” said Raymond Chan Yuk-ming, chairman of the public and social affairs committee of the Hong Kong Institute of Surveyors.
He proposes limiting the types of common area that can be included.
“It would be more reasonable if owners were asked to pay for facilities that they really appreciate and enjoy,” he said.
Louis Loong Hon-biu, secretary general of the developers association, said common facilities add value to estates and therefore to flats.
Shih, of Centaline, said the government should set a definition of gross floor area.
Developer Swire Properties said it would welcome a standardised definition of gross floor area since it would enhance transparency and consistency.
A spokeswoman for Cheung Kong (Holdings) said the company followed association guidelines.
Despite the controversy, owners who buy flats “off plan” – meaning before they are built – and only find out later how small they are seldom complain.
Sai Kung district councillor Chan Kai-wai said he had received complaints about flats sold in Tseung Kwan O, but the buyers refused to talk to the media.
“Who would undermine the resale value of their own property,” he asked.
Interview between JB Jeyaretnam and FEER editor Hugo Restall in 2008 before his death.
SCMP Sep 15, 2009
A one-bedroom flat in a luxury development in Tsim Sha Tsui has fetched a whopping HK$30,025 per sq ft, setting a record in Hong Kong.
A Hong Kong businessman who owns a trading firm has paid HK$24.5 million for an 816 sq ft flat on the 56th floor of The Masterpiece for his own use, according to Centaline Property Agency, which concluded the deal. The price is a record for a one-bedroom flat.
The useable area of the apartment is just 590 sq ft, similar to flats in mass residential projects.
Thomas Chan, Centaline sales director, said the buyer was willing to pay the high price because the flat offered views of Victoria Harbour and was centrally located.
In 2007, the average price of one-bedroom flats at The Arch, above Kowloon Station, was HK$17,000 per sq ft.
The 64-storey The Masterpiece in Hanoi Road was developed by New World Development and the Urban Renewal Authority.
It is the second-tallest residential building in Hong Kong after The Cullinan, above Kowloon Station.
The one-bedroom flat is the smallest unit in the project.
“The buyer could get a second-hand luxury flat with at least 1,500 sq ft and three bedrooms in Mid-Levels” for the price, said Koh Keng-shing, managing director at Landscope Surveyors and Landscope Realty.
Even though average prices at housing estates such as Taikoo Shing are still down from their 1997 peak, property agents said luxury residential prices had already exceeded their 1997 levels. The city’s most expensive flat is a 7,088 sq ft unit at Branksome Crest in Mid-Levels, which sold for HK$240 million, or HK$39,786 per sq ft, in December 2007.
Flats previously peaked at about HK$20,000 per sq ft in 1997, Koh said.
The most expensive residential property in the city is a 3,300 sq ft house at 8 Severn Road on The Peak, which sold for HK$285 million, or HK$56,800 per sq ft, in June last year, making it the most expensive residential dwelling in Hong Kong and also Asia.
The new luxury developments in non-traditional luxury residential areas such as Tsim Sha Tsui and Kowloon Station are fetching higher prices than apartments in Mid-Levels and other high-end residential areas.
“Those projects have attracted new demand from mainland buyers and local investors, not the local end-users,” Tsang said. “Some of the projects are overpriced. It may be risky for the buyers.”
Tsang had confidence in the market outlook for luxury residential developments in traditional luxury areas as the supply was expected to remain low in the next few years.
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Hop Cheong Pens & Lighters Co.
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Winner Pens Collection
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Man Yee Arcade, Shop 110
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Feng Yuan Co
G 21, Houston Centre,Tsimshatsui East, Kowloon, Hong Kong
好時中心 G21 店
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名筆館 Pens Museum
灣仔 : 香港灣仔港灣道1號會展廣場1樓101C號舖
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1 Harbour Road, Wanchai, Hong Kong
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One of the best trance songs ever, from the 1999 album, Deeper Shades of Hooj.
Embracing the Goddess energy within yourselves
Will bring all of you to a new understanding and value of life
A vision that inspires you to live and love on Planet Earth
Like a priceless jewel, buried in dark layers of soil and stone
Earth radiates her brilliant beauty, into the caverns of space and time
Perhaps you are aware of those who watch over your home
And experience it as a place to visit and play with reality
You are becoming aware of yourself
As a Gamemaster
Imagine earth restored to her real beauty
Steady trees seems to brush the deep blue sky
The clouds billow to form the majestic peaks
The songs of birds fill the air
Create a symphony on symphony
The Goddess is calling for an honouring of what she allows to be created through the form of strength and blood
Those who own our planet, are learning about love
Goldman Says Deleveraging May Keep Fed Rate Low for ‘Years’
By Simon Kennedy
Sept. 10 (Bloomberg) — The Federal Reserve may keep interest rates low for “many years” to help U.S. consumers and companies as they pare back debt, according to economists at Goldman Sachs Group Inc.
Sluggish spending as households reduce debt could lop as much as 2 percentage points from U.S. economic growth over the next three years, New York-based economists Peter Berezin and Alex Kelston wrote in a report released late yesterday. While not enough to threaten a long-term recovery, it may require the Fed to offset the weakness by keeping its benchmark rate unchanged through 2010, they said.
“It is hard to escape the conclusion that the Fed may need to maintain fairly low interest rates over a period of many years,” wrote Berezin and Kelston. “If you want to bring down leverage, you should keep monetary policy sufficiently accommodative to forestall a collapse in spending and a deflationary spiral.”
The Fed’s key rate is now near zero as it fights the worst recession since World War II. Keeping U.S. rates there until 2011 may represent an “attractive buying opportunity” for U.S. bonds and threaten to inflate asset bubbles in economies that tie their currency to the dollar, the Goldman economists said.
While leverage has already started declining as banks strengthen their balance sheets, the process of reversing private credit may take much longer and is only in its early stages, according to the report. One consequence is likely to be an increase in household savings and subsequent decline in consumption as a share of gross domestic product after it averaged 70 percent in the past decade, compared with 65 percent in the previous four decades, the authors said.
Reverting to its historical average will imply consumption growth lags behind overall GDP expansion by about 85 basis points per year, Goldman said. Beyond the next three years, that will be enough to shave the economy’s growth by as much as 1 percentage point, it said.
While many forecasters project the Fed will raise rates next year, the Goldman economists said their expectation that the Fed will hold fire may benefit bonds. Keeping borrowing costs low may also mean economies that peg their exchange rates to the dollar may ‘end up with interest rates that are too low for too long, thus raising the possibility that asset bubbles will develop,’’ they said.
In addition to low interest rates, other support for the U.S. economy will come from companies slowing the rate of inventory reduction and increased exports to emerging markets, as well as government spending, according to the report.
Outside the U.S., the economists said those economies that weathered the financial crisis relatively well, such as Australia and Norway, will be able to raise interest rates sooner than the U.S. Investment in those economies with more leverage such as the U.K. and Spain will recover more slowly than those with less debt, such as Germany and Japan, they said.
HK recovering from global recession, says FS
Regina Leung and Agence France-Presse
Updated on Sep 08, 2009
Hong Kong’s economy was slowly recovering from the global recession, Financial Secretary John Tsang Chun-wah said on Tuesday at the opening of the Asian Aerospace International Expo and Congress.
Tsang, who opened the three-day exposition at the AsiaWorld-Expo venue on Lantau Island, was upbeat about the economy.
“Recent economic data indicates that economies – including Hong Kong’s – are emerging from a severe recession, and are preparing for take off,” he said.
Tsang noted that the aviation sector had been hard hit by fluctuating fuel prices, cancelled or delayed orders, and falls in customers, cargo and profits.
But it was also an ideal time for the industry to explore new technologies and strategies to improve efficiency and reduce costs, he said.
“Asia, in particular China, is one of the world’s fastest growing regions for air transportation, with growing demand for aircraft and related equipment and services.
“This presents huge opportunities for all parties inside and outside the aviation industry,” Tsang said.
He said Hong Kong was an ideal place to host the expo as it had one of the world’s busiest airports.
“The city’s aviation network covers 150 destinations worldwide, including 40 mainland cities. Everyday, the Hong Kong International Airport handles more than 800 inbound and outbound flights,” he said.
The biennial meeting is hailed as one of the world’s most influential air shows. It was moved from Singapore to Hong Kong in 2007 to be closer to mainland, now one of the world’s fastest growing aviation markets.
“It’s the first time that China has put a face in front of the global aviation industry,” said Richard Thiele of Reed Exhibitions.
Thiele, Reed’s head of sales for aerospace and aviation, said despite world airlines being hurt by the global downturn, 10,000 visitors and 356 firms are expected to take part in Asian Aerospace.
Chinese media reports have estimated that the country’s airlines would need a total of 1,600 new passenger jets by the year 2020 and 3,000 by 2050, at a cost of billions of dollars.
Legal luminary Cashin dies at 89
Ex-Rugby Union president had colon cancer
By Carolyn Quek, Teh Joo Lin & Terrence Voon
ONE of Singapore’s longest-serving lawyers – who took on the inquiry into the 1983 Sentosa cable car tragedy and the sensational Adrian Lim murder trial – died early on Thursday morning after a long battle with cancer.
Mr Howard Edmund Cashin, 89, had practised law here for more than 50 years. So passionate was he about his profession that he spent almost every day in court, said his widow, Mrs Lily Cashin, 53.
Outside the courtroom, he pursued his other passions – rugby and cricket – and was the Singapore Rugby Union’s (SRU) president between 1977 and 1987.
Speaking to The Straits Times at their bungalow in Sarimbun, near Lim Chu Kang, Mrs Cashin said he retired from law practice after contracting colon cancer in 2003.
The cancer went into remission in 2007 after intensive treatment, but resurfaced late last year. Mr Cashin decided to forgo treatment and the cancer took its toll, but he remained mentally alert, even during his last days.
Though he was bedridden when his wife told him the English cricket team had won The Ashes test series, he cried: ‘Oh, that’s wonderful.’
Mr Cashin read law at Oxford and returned to Singapore after World War II. He spent many illustrious years at law firm Murphy & Dunbar.
Dr Myint Soe, 75, a partner with the firm for many years, said he was a meticulous lawyer who excelled at cross-examining witnesses, ‘especially those who were not telling the truth’.
High Court judge Choo Han Teck, 55, once Mr Cashin’s assistant, said he was effective in court because he understood human nature well.
‘He was able to get witnesses to say things they should say – not an easy thing to do in court,’ said Justice Choo.
While he was SRU president, Mr Cashin slapped a life ban on local rugby star Song Koon Poh for flouting the rules. Now 55, Mr Song, says he has no hard feelings towards the man who he feels took Singapore rugby to new heights. ‘He was also the only man to give local rugby a chance then. His passing is a great loss,’ said Mr Song.