GFA Harmonisation, Decoded
Updated: 1 day ago
You hear agents telling you that a particular new launch has been "harmonised". And that's supposed to be a good thing? But you wonder... why?
So, here's why. First, let's go back to the basics.
Gross Floor Area (GFA) is the total area of covered floor space inside a building, measured to the middle of its external walls, and excluding empty vertical spaces.
Harmonization of Floor Area was introduced in September 2022 (effective June 2023) to standardise how floor area is being measured. Prior to this, different agencies had different ways of measuring floor area. For example, URA uses GFA to determine how much can be built on a site, while BCA uses Statistical Gross Floor Area (SGFA) to measure the total floor space in a building. So, the same building could have different floor-area figures depending on which agency you were looking at.
And that could get pretty confusing — especially when you're trying to understand what you're actually buying.
Harmonisation was thus introduced to bring these different definitions closer together, making the numbers more consistent and reducing confusion for property owners and industry professionals.
But here’s where it gets interesting for homebuyers…
Simply put, not all spaces in a condo are counted the same way. Some count towards GFA, while others don’t. The trouble was that a unit's floor area was usually inflated by including non-liveable spaces such as air-conditioning ledges, planter boxes, and double-volume voids. This essentially meant that consumers were paying for these void spaces that were not even usable!
With the introduction of the GFA Harmonisation, these non-liveable spaces are no longer included in the total unit size. Due to this change:
It may seem like the post-harmonisation units are smaller, but fret not, you're only paying for spaces that you can actually use!
Also, if you're comparing the Per Square Foot (psf) price between a pre- and post- harmonisation unit, it may seem that the latter is more expensive. Do remember that the pre-harmonisation unit is heavily inflated with unusable spaces. It is simply not an apple-to-apple comparison.
Developers need to now design highly efficient layouts since the space they are selling, must be functional and usable!
And because of this transition to harmonised GFA rules, it has has opened up temporary pricing gaps in the new launch market.
Entering the market during this pricing mismatch locks in an immediate valuation advantage. When buyers fully adapt to the new rules, these post-harmonisation units will inherently outperform older, space-wasting designs, thereby driving faster capital appreciation.
Interested to know more about this pricing gap? Drop me a text!
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