What is net area vs gross area and how it effects your real estate

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La Vista World – A New Beginning
September 9, 2021
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What is net area vs gross area and how it effects your real estate

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When a building with communal living is constructed, where you get multiple living quarters or flats, as well as some units that are intended to be used for commercial activities like offices or shops, the architects and designers keep a lot of things in mind. Some of the most obvious things are like the overall design and construction of the building, the overall size of the units, the ventilation of the building, to name a few.

And one of those things is the net area of the building versus the gross area of the building. Before we proceed explaining why it is important, let us just explain what these two terms are and what they mean. 

Net Area vs Gross Area

So let’s say you own a one-bed flat in a building. All the area that is within the boundary of that one-bed flat that you own, and that you have control and ownership of, is the Net Area. The room, the hall, a washroom and a kitchen etc.; it’s your space. You own it and you can do whatever you want to do in that space.

On the other hand, the Gross Area is the total area which includes common circulation areas, as stated above, like corridors, emergency stairways, lifts, lobbies, ventilation areas like common balconies etc. This is the space that is used by everyone in the building. A lift will be used by anyone living from the first floor to the top floor. Similarly lobbies are accessible to everyone living in the building. These are the spaces the developers make for the ease and comfort of the residents of the buildings. 

Simply put, the net area is the actual area of the accommodation within four walls. Whereas the gross area includes any common areas like the corridors, stairways, and lifts etc.

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Now the thing is, when you buy an apartment or a shop or an office in such buildings, you are not just paying for your own four-walls, you are actually paying for these shared spaces as well. The developers do not pay for such common places from their own pockets. It is the occupants that share the cost of such common areas/spaces. The price of your flat includes the cost of construction of such areas as well. 

But now the issue is, sometimes the buildings are designed and constructed so poorly, and in such a way that there is a lot of wastage. We have noticed this happening quite a lot in the construction of real estate projects here locally in Pakistan. Usually the net and gross areas are calculated as a ratio. Lower the ratio, better the net area against the gross area. During our time doing the research, we found out that some projects have a gross area ratio as high as 55% compared to the net area of the floor.

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Let’s take a look at this image below showing the measurement of a one-bed flat by one of the renowned developers in Pakistan. The flat number 12 has a net area of 467 sq. ft. and the gross area is 724.41 sq. ft. The flat number 11 has a net area of 463.52 sq. ft. and the gross area of 720.12 sq. ft. The net vs gross area ratio is calculated by subtracting net area from gross area and dividing the answer by the net area. That makes the net vs gross area ratio of both these flats 55%.

net area vs gross area

Now let’s measure the ratio for one of La Vista World’s one-bed flats (floor-plan pictured below). The net area of this apartment is 596 sq. ft. whereas the gross area is 731 sq. ft. And when you calculate the ratio, it’s 22%.

Compare these ratios to the other available apartment buildings and you will discover how much value for your money is being offered by La Vista World.

So the crux of the matter is that you are basically paying LESS for equal, if not more, amount of accommodation.

Also Read: La Vista World – A New Beginning!

At La Vista World, we are delighted to say that we have one of the lowest gross vs net area ratios in the building of this magnitude among our competitors being at 18.28% for our 2-bed-hall apartment. The net/gross area ratio of our three bed presidential penthouse in the west tower stands at 18.44%. The overall ratios vary from 18% to 22% depending upon the type and location of the unit.

It is pertinent to mention that this goal was not easy to achieve. It took months of planning and multiple redesigns to come up with a solution that is not only viable for us but is also desirable for the customers. 

It is quite often for occupants of such buildings to find out later after moving in the space that has been wasted by the developers and how it could have been used in a much more efficient way. In the meanwhile, the developer has moved on to a new project whereas the residents have to live with the developer’s mistakes. So think wisely when you are making a choice and investing a huge sum in a property that will potentially be your home for a long time. Look at such critical details when buying a property in such buildings.

Inquire about it from the developer if you feel it is being hidden from you intentionally. Make an informed decision and invest wisely.

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