It's defined in s. 63 of the Act. A house is overcrowded if:
(a) two or more persons, who are over 10 and who are of opposite sexes, and who are not conjugal partners, ordinarily have to share a bedroom; or
(b) if any room which has to be used as a bedroom has less than 400 sq. ft. of airspace.
The situation you describe does not suggest overcrowding under paragraph (a). Obviously without knowing the room dimensions its impossible to be categorical about para (b), but if this property was built as a one-bedroomed apartment then it will certainly include a bedroom with the required airspace, so it's very unlikely that it is overcrowded under para (b).