“Kathleen, a question for you. When talking about real estate prices, you talk about dollars per square meter, for example, US$1,000 per square meter. What does this mean? That is, what does it cover? Does this cover the land and the house and landscaping? Or is this just the house? I know this is a very general, basic question, but I’ve seen this mentioned many times in your reports and it is not clear to me.”
–B.B., United States
I’m sure you’re not the only one who’s been confused.
Because, in fact, the definition of what’s included in the cost per square meter can change country to country. Some places, such as France, are very careful about these quotations and regulate what representations can be made closely. In France, you can’t include any area with a ceiling height of less than 1.8 meters in the per-square-meter calculation for the property overall. It’s called the Loi Carrez, and the thinking behind it, I guess, is that, if you can’t stand up in the area, you can’t include it in the meters you’re charging for in the price.
In other parts of the world, these figures are thrown around much more carelessly. In Panama, for example, we’ve viewed houses for sale where the seller included every conceivable meter in his total count–including balconies, terraces, porches, and even the driveway. Right, the house came with a driveway, but we weren’t going to be able to use it as livable space. The area it covered, therefore, from our point of view, should not have been included in the calculation for the per-square-meter cost of the house. We didn’t mind paying for the driveway as part of the package…but we thought the per-square-meter price should have been less than that for the interior area of the house. The seller didn’t see it that way. (We didn’t buy the house.)
Strictly speaking, the meters quoted should be only those contained within the interior of the house or apartment. Balconies, terraces, patios, and porches don’t count. Back yards don’t count. Driveways don’t count. At least not at the same rate as the interior living space.
Sometimes you’ll see these things broken out–for example, a house listing sheet may indicate so many square meters of living space, so many square meters of covered outdoor space, so many square meters of garden, etc. This is the best case, as it allows you to really understand what you’re paying for what you’re buying.