The price of harmony

In late 2022, URA announced a new policy: Harmonisation of Floor Area Definition.

Why I am bringing this up now is because the first condo launches under this policy has arrived in the market and we can see how​ the size and pricing matched up.

What is this policy about?

• Purpose: The goal is to standardise how the Gross Floor Area (GFA) is measured across different government agencies (URA, SLA, BCA) since prior methods were inconsistent.
• Key Changes

1. ​Exclusion of non usable space Developers can no longer include features like oversized air-con ledges, planter boxes, or other non-usable areas in the square footage for sale.
2. Removal of strata void space: Vertical space from floor to ceiling (previously counted in GFA) is no longer included, potentially making high-ceiling units more appealing since buyers aren’t paying for air space.​

Impact of GFA Harmonisation

• First Launch Under New Rules: Lentor Mansion is the first new condo to adopt these changes, and it reflects more efficient floor plans with no wasted space like large bay windows.
• Better Value: Even if a unit appears smaller in square footage, it has more usable space compared to older or less efficient condos, offering better value for money.
• Pricing Distortion from GFA Harmonisation: Before this policy, take for example a  1,000 sq ft unit might include inefficient space and cost $1.6 million, equating to $1,598 psf. Now, after harmonisation, the same unit will be indicated as about 947 sq ft. The price of $1.6 million is still the same but the per square foot price jumps to $1,690 psf, making it appear more expensive.

Takeaway for Buyers

• Focus on Usable Space: With GFA harmonisation, newer condos with more efficient layouts may provide better value, even if they seem more expensive at first look. Always assess the actual usable space and floor plan to determine the real value of the unit you are buying.

The first wave of projects launched that are being ‘harmonised’ are Lentor mansion, Emerald of Katong, Nava Grove and Novo Place at this point at the end of 2024.

You can refer to the official URA announcement here - www.ura.gov.sg/Corporate/Guidelines/Circulars/dc22-09

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