MACAU BUSINESS
years despite the city’s currency being indirectly pegged to the greenback via the Hong Kong dollar; this, due to the ample capital pool in the local financial system. But local banks finally increased the interest rate by 0.125 per cent in September, the first time for 12 years, signalling the end of a low interest rate era.
ON THE SIDELINES Amid the start of the rising interest rate cycle and government property curbs introduced in 2018 to rein in soaring home prices, local developers have jumped on the bandwagon in recent months to offer incentives to entice homebuyers to stimulate sales. For instance, Dong Fu Ye allows a long period for buyers to seek financing and settle down payment, while developers of luxury projects Praia Grande & Praia Peninsula in Fai Chi Kei and Praia Park in Seac Pai Van permit buyers to settle payment with them in instalments without bank loans. The latest incentive came from La Marina – a high-end
development of over 2,700 units in the Areia Preta district – which offers a subsidy of 3.15 per cent of the property value for buyers on stamp duty. But incentives have so far failed to ramp up sales significantly. “There are more flat views, which do not immediately
translate into transactions,” said Lily Hong, Sales Director of Midland Realty (Macau) Ltd. “Buyers are still adopting a wait-and-see approach now [in the event of] any changes in the market.” The latest figures from the Statistics and Census Service
reveal that home prices have so far maintained a growth trajectory for 2018 despite a slower pace in recent months. The average home price in the third quarter stood at MOP103,844 (US$12,980.5) a square metre, up 4.6 per cent from the previous year. The growth was higher than the 3.2 per cent up-tick of the second quarter, the lowest increment since the second quarter of 2016 when the property market had just snapped a losing streak of more than a year.
STAGGERING SALES In nearby Hong Kong, the market might even reach tipping point. Hong Kong’s official price index of used homes plunged for two months in a row, recording a 1.44 per cent decline in September and a 0.08 per cent drop in August. The latter was the first decline in 28 months. Leading property agency Jones Lang LaSalle predicted in
November that home prices in the Asian financial centre will fall by 15 per cent next year, and that the slide will even be as much as 25 per cent if the Sino-US trade war worsens and the rout in the Hong Kong stock market deteriorates. ‘Hong Kong’s almost 10-year housing market bull-run looks like it is coming to an end,’ the company said in a report. Lily Hong of Midland Macau believes the Macau market
will fare better, however, as some Hong Kong homeowners have asked for a second mortgage for their properties, a practice that is not common here. “Macau home sellers have ampler financial power and will
not lower asking prices easily due to fluctuations in the macro economy,” she said, although conceding that the number of home transactions might remain stagnant for some time. Official figures show Macau posted 9,066 home transactions in the first nine months of 2018, increasing by 13.9 per cent from a year earlier.
22 JANUARY 2019
“
As long as the gaming sector doesn’t slump, the home market will not go down,
SAY S GREGORY KU KA HO, MANAGING DIRECTOR OF JONES LANG LASALLE MACAU
” First-time buyer market H
ome sales this year have so far been dominated by first-time local buyers after the government
loosened mortgage lending ratios for this segment. Official figures show that local first-time homebuyers accounted for 62.9 per cent of total home transactions in the first 10 months of this year, or 6,074 of 9,659 homes. Local homebuyers who owned one
residential unit or more accounted for 31.7 per cent of home transactions – or 3,059 units – in the same period, while foreign and corporate buyers accounted
for only 5.4 per cent of the total number. The dominance of local first-time homebuyers in the market is due to the fact that authorities unveiled new mortgage loan ratios for first-time resident buyers aged 21 to 44 years in February in a bid to help the young buy their own homes, while imposing a new stamp duty of 5 per cent on buyers acquiring a second residential unit and of 10 per cent on those buying a third or more properties at the same time. Prior to the new rules, local first-time homebuyers accounted for about 30 per cent of total home transactions here.
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