How to read a price per square foot: land, built-up, and the trap

Take a two-storey terrace on a lot of a certain size with a house of a certain size on it. Divide the price by the land and you get one RM/sqft. Divide it by the built-up floor area and you get a different one, often smaller by half. Both are "price per square foot". Neither is wrong. Every comparison you will ever read uses one of them, and most do not say which.

The site holds 492,447 recorded sales and shows a same-type, same-scheme comparison beneath 267 of the snapshot's auctions. All of it depends on getting this one thing right, so this guide is about that one thing.

Two areas, one number

Every property has up to two areas that matter.

Land area is the parcel: the ground the title describes. A terrace lot, a semi-detached lot, a bungalow lot, a piece of agricultural land. It is what NAPIC records for landed property and what the Proclamation of Sale states for landed property.

Built-up area is the floor space of the building. For a strata unit — a flat, an apartment, a condominium, a strata office — it is the only area that exists, because the unit owns no land. NAPIC records a strata unit's built-up area in the same column where it records a landed lot's land area, and the court notice does the same. That single column is the source of almost every RM/sqft confusion in the market.

The trap, stated plainly

A listing site that takes that column and labels it "land area" for every property is right for the terrace and wrong for the condominium. A site that divides every price by "floor area" gives a sensible number for the condominium and, for the terrace, a number that has nothing to do with how NAPIC priced the sale next door.

Worse, a table that shows one area column and one RM/sqft column, computed on different bases, hands the reader a contradiction: divide the price by the area shown and you do not get the RM/sqft shown. The reader concludes the table is broken. It is not broken; it is unlabeled.

The rule the site follows: landed property is priced on land; strata is priced on built-up; every figure says which. Its comparison line beneath a reserve states the basis — "of land" or "of built-up area" — and its area column is the priced area, so price divided by area equals the RM/sqft beside it on every row.

How to check any comparison in thirty seconds

1. Find the basis. If the table or the sentence does not say "land" or "built-up", assume you do not know, and find out before you use it.
2. Divide. Price by the area shown. If the result matches the RM/sqft shown, the basis is whatever that area is. If it does not, the two are on different bases and the RM/sqft is not comparable to anything on the page.
3. Match like with like. A landed RM/sqft against a landed median, on land. A strata RM/sqft against a strata median, on built-up. Never a landed reserve on land against a scheme median that was computed on floor area, or the discount will be a fiction.

Why the basis matters more at auction than anywhere else

An auction buyer is deciding on a percentage — how far the reserve sits below what the same kind of property recently sold for. A basis mismatch does not shift that percentage by a little. It can turn a genuine discount into an apparent premium, or invent a discount that is not there, because land area and built-up area differ by a multiple, not a margin.

The site's guide on how deep auction discounts run by state uses land basis throughout; its guide on the cheapest RM/sqft by state is landed property only, for the same reason. When a figure on the site cannot be given a basis honestly — a shop-office whose notice states one area without saying which — the site prints no RM/sqft rather than a wrong one.

FAQ

Is price per square foot calculated on land or built-up area?

Landed property — terrace, semi-detached, detached, land — on land area, which is how NAPIC records it. Strata — flats, apartments, condominiums, strata offices — on built-up area, because a strata unit owns no land.

Why do two websites give different RM/sqft for the same house?

They divided by different areas. One used land, one used built-up, and at least one did not say. Divide the price by the area each shows to find out which is which.

Which number should I use to compare an auction reserve to the market?

The same basis as the recorded sales you are comparing against. The site's comparison beneath each reserve states its basis; match it.

What this is, and is not

An explanation of the two area bases and the rule the site applies, with the corpus counts it applies them to. It is not a valuation method and does not say what any property is worth; it says how to read the numbers that do.