Bay windows: Begone!
Thu, 2009-04-30 09:00 — mrb
A couple of things have come to bug me about Hong Kong apartments. First, they're built to catch as many rays of sunshine as possible. Second, the quoted floor-areas bear little relation to how much usable space you'll actually get.
Ten bonus points if you can guess the common cause of both bugs.
'Bay windows' you answer? Full marks, take the rest of the day off!
First, the bay window's role in making confusing floor-area measurements...
If you've bought or rented a flat in Hong Kong, you've quickly realised (if this is news to you, sorry!) that the quoted floor area is useless until you know the 'efficiency'. So if estate agent tells you 'this flat is 800 sq ft, with a 75% efficiency', what they mean is you're looking at a 600 sq ft flat.
Since the gross area is the figure that is quoted publicly (estate agent windows, developers' websites, etc), it makes comparing different buildings a hassle. You can't really compare them until you've got the efficiency from the agent, and done the quick calculation to find the net, usable space.
In the above example, the 'missing' 200 sq ft is made up of your share of public areas, and the area of any bay windows in your apartment. Bay windows are common in older UK houses, but there the bay area runs from floor to ceiling, meaning you really get extra floor space. Here in Hong Kong a bay window starts a couple of feet from the floor, and ends a couple of feet below the ceiling. So you get a big window ledge, but certainly no more floor space.
Now I have in mind that bay windows are so common because the developers (the people that build the high-rise apartments in the first place) get some benefit from them. Can anyone point me at any documentation that confirms this? Since everyone that buys or rents a flat is only interested in net values, I don't understand why we all have to put up with gross areas.
The other problem with bay windows is that they stick out of the building to catch every ray of sunshine. If you look at old buildings, some sort of veranda was common, shading the windows and helping to keep the interior cool. Ok, verandas aren't likely on the 40th floor, but keeping the window flat to the wall will be cooler than having a bay window. And a simple ledge above a flat window to provide shade will keep it cooler still. Cooler flats mean less aircon, and lower energy consumption.
If any architects are reading this, I'm sure it is nothing new or exciting. But can you explain why we don't do it?
Can't we start using net values when quoting floor areas? Especially if that takes away the incentive for developers to stick bay windows on new apartment buildings, and so save energy for all.
Comments
Real estate monopoly
Starting from the government's high land-price policy to the monopoly given to the few extremely rich property developers who make obscene profits, housing has to be the greatest failing in HK. Other than public housing, lodging is practically unaffordable. How can one justify purchasing a flat here when it asks for a 30% premium to New York City and 50% to Singapore, the closest competition city? On top of it, you are just purchasing a lease for 99 years - whatever that means legally! Less than 40 years from now, the "1 country 2 systems" will come to an end - what will be the legal implication then? I am paying horrific rents but until I can resolve these questions, I can't get myself to pay an exhorbitant price for an asset with 38 years of life. Can anyone enlighten me to approach it differently?
Should I buy a flat?
I don't remember we gave this much thought before we bought. If we did, it was just to ask "Will the exorbitant price likely be the same or higher when we come to sell?". I think that's what it boils down to. Cheaper property in other cities might influence your choice of where to live, but once you've chosen Hong Kong, overseas prices aren't really relevant.
Private ownership of property is becoming steadily more widespread in the mainland, so I don't worry too much about the day when we become one country, one system. And a quick check of our mortgage documents shows the government lease for this plot of land is for '999 years commencing from the 31st day of March 1873'. If I'm still around for that to be an issue, 800 years of compound interest on my savings will hopefully mean I've got nothing to worry about!!
What do other readers think? Buy or rent?
net area
When I did my latest rental search, my favourite agent said that now by law, all properties have to give the gross and net floor areas. I used 3 agents and for each I insisted the 'travel documents' (the things they thrust in your hand as you get in the car) included gross and net area. The efficiency of older buildings (pre 1970's property boom) can be up to 90% and that of places like cyberport I'd say isn't more than 60% (and I'm being generous). The problem with older places is that you're unlikely to get a mortgage, or if you do, not for much of the value.
We could NEVER afford to buy the type of place we're renting. So we bought elsewhere, as many people do. If and when we buy it would be a small investment flat.
I believe that current leases only go up to 2047. I'm not sure of the implications of that, but H points out we'd be over 80 by then and who cares, we'll nearly be dead and the kids must just find their own way!!
Should I buy a flat?
If for various reasons, the decision is made to settle down in Hong Kong and be here for quite some time, then buying a property would be a sensible move. After getting over the difficulty in forking out the 30% downpayment for a newer flat or more for an older one, owning one's own property, in my opinion, is a better substitute to renting and finding a new place every two years or so.
heirs...
If you inherit a residential property, does the 99 year lease 'timer' start from zero since you'd be the new owner? Or do you inherit only the remaining years on the lease that started from when the deceased bought the property? Is 2047 a cut-off date for all leases, new and old?
Leasehold land in Hong Kong
Unless you live in St John's Cathedral (the only plot of freehold land in Hong Kong), your house/apartment is built on land leased from the Hong Kong Government.
Leases that were granted on Hong Kong Island between 1848 and 1898 were for 999 years. The leases weren't altered by the handover, so if you'll feel more secure having a long lease, these are the ones to look for.
Other leases issued in the colonial era were generally for 75-years, sometimes with the option to renew for a further 75-years. So, you might come across a property still covered by this type of lease.
Since 1985 (ie when the Basic Law took effect) new / renewal leases were granted until 2047, and since 1997 they've been granted for 50 years. These are the type of lease you're most likely to encounter. If you live on land covered by this type of lease, you'll also need to pay annual government rent at 3% of the rateable value of your property.
It's not yet clear what will happen to these recent leases in when they expire in 2047 / after 50 years. If they follow current practice, the leases will be automatically extended for another 50 years. Tenants won't need to pay any premium, but will continue to pay the annual government rent. If that's the case, expiry of leases in 2047 will be a non-event, and won't have any effect on property prices. eg all colonial-era land leases in the New Territories expired a few days before the handover, and went through this automatic extension process without affecting property prices.
Vinnie, the lease 'timer' starts with the grant of the lease, and is independent from change in ownership. eg we bought our apartment 7 years ago, the estate was built 20 years ago, but the lease for the two Inland Lots it occupies started in 1873, and expires in 2872.
This above is my summary of a good explanation I found here.
re: leasehold land...
Thanks for addressing my confusion, Mr. B. This helps me understand the 'leasehold land' concept which is quite foreign to me. Thinking about it the other day, it had seemed to me that if your land lease ran out, you could just pull our your unit from the 27th floor, say, and take it to another building with a new lease. ;) The link looks to be some interesting reading...
Why Bay Windows?
The document I linked to above describing leasehold, also has a section talking about Bay Windows:
1.3.8 Why bay windows are everywhere in Hong Kong?
Since March 1980, projecting (bay) windows are exempted from
GFA calculations, if the following criteria can be satisfied:
(1) the projecting window is for domestic accommodation only;
(2) only one such projection is situated in any one room;
(3) two adjacent projections do not form one continuous projections;
(4) the extent of the projection is not more than 500mm from the face of external
wall;
(5) the base is not less than 500mm above finished floor level;
(6) the top is not less than 500mm from the underside of the finish ceiling; and
(7) the window provides protective barrier at 1100mm level.
Developers got the concession from the government, but charge the buyers. Thus, Hong Kong has become “a City of Bay Windows.”
Interesting!
Bay windows
Yes, nothing like a set of rules marking out just how far you can go in messing around with flat buyers!!!
Chez Tall features bay windows in the living room and all three bedrooms. They do have their uses -- e.g. we've put down some cushions on the one in our living room for use as overflow seating -- but on the whole they're pretty irritating. One big problem is that they suck in clutter with the power of small black holes. It's so tempting to just 'set this down here on the bay window for now', over and over, until they're more or less obscured by junk!
Finding the 'real' area of a flat
As gweipo mentioned, there is progress on making the measurements more realistic. The short answer seems to be to always ask for the 'Saleable Area' of a property.
The Real Estate Developers' Association (REDA) has issued guidelines to their members on how to describe floor areas in brochures for new flats. The actual document is entitled 'Sale descriptions of uncompleted copies', and in Annex A of the 10th Oct 2008 version, they give a clear example of how to quote floor spaces for an imaginary flat (all meaurements in sq. ft.):
(including balcony and
utility platform)
(Balcony:22)
(Utility platform:12)
However, check the small print for brochures that may have been printed before these guidelines were issued. eg I checked the 'Reference Information' document on the website for 'The Sail', a property currently under development. The document includes a definition of 'Saleable Area' which has a couple of interesting points. First the floor area is measured from the 'exterior of the enclosing walls'. I don't know about you, but I don't get much use from the space occupied by my flat's walls. Second, it appears they include the area of Bay Windows, unlike the example shown above.
So, buyer beware.
What about existing properties? I thought I found some good news there too. The Government's Rating & Valuation Department has a 'Property Information Online' website, and one of the options is to check any property's Saleable Area. I tried it, and checked our current flat's saleable area. It is 84% of the gross floor area, which is pretty good for a Hong Kong flat.
The document you download also gives a definition of 'Saleable Area':
Saleable area is defined as the floor area exclusively allocated to the unit including balconies, utility platforms and other similar features but excluding common areas such as stairs, lift shafts, pipe ducts, lobbies and communal toilets. It is measured to the exterior face of the external walls and walls onto common parts or the centre of party walls. Open yards, bay windows, airconditioning plant rooms, flower boxes, open terraces, attached roofs and carports are excluded.
So, Bay Windows should be excluded, but it appears measuring to the exterior face of external walls is the correct practice. Whoever came up with that idea?
Some other comments about the site.
To rub salt into the wounds, the document also says:
The charge for this enquiry service is purely aimed at recovering the operation cost and does not reflect any profit making element. Please note that the information released by the Property Information Online is extracted from the Rating and Valuation Department’s property database which is primarily set up for rates and Government rent purposes. Such information is released for quick reference only. The Department in no way warrants the accuracy of the information for any purposes other than rates and Government rent assessments.
So... you're charging me to cover the costs of accessing the information, but it's all in the database anyway. I'm guessing that the $12 fee is to cover the cost of implementing the payment services that are used to collect the fee that is used to cover the .....
Aiyaa. Just give the database to centanet.com and gohome.com.hk, and let the distribute it for you.
Some ideas:
Lease Expiry
If Hong Kong has a government in 2047 willing to evict millions of New Territories residents from their homes rather than renew their leases, I think we will have more pressing concerns than property prices!
How to remove a bay window ledge
Bay window ledges in Hong Kong don't appear to be structural supports. How hard would it be to remove them? I'd be interested to hear from anybody who has tried to knock these out.