Centaline estimates property prices rebound by more than 5% next quarter
Real estate company Centaline Property Macau estimates the Macau property market will gradually pick up and property prices may rebound by more than 5% in the next quarter.
“It is estimated that after the Chinese New Year this year, with the start of some new first-hand properties and the recovery of internal and external sentiment, the Macau property market will gradually pick up, which is expected to be reflected in the number of transactions in March and April at the earliest. [There is] a chance of a rebound to the level of around 500 transactions in March last year, and in terms of prices, driven by the increase in the number of transactions, property prices may rebound by more than 5% in the next quarter,” Centaline Property Macau said.
The Senior Regional Sales Director of Centaline Macau Taipa, Lo Chun Meng, said that in recent years, property prices in Macau have not fallen much despite the Covid-19 pandemic, with transaction prices still above MOP100,000 per square meter, and rental returns have remained relatively stable, with residential properties generally yielding around 1.5% and some commercial properties yielding even higher returns.
“In addition, the property market is more self-sustainable and is supported by domestic demand in the long run. As the pandemic has weakened, the general sentiment of property owners on bargaining is [that it is] easier than before,” Lo added. “Some users and investors had already entered the market before the Chinese New Year.”
Nevertheless, he indicated that the earlier announcement by the Central Bank to ease credit facilities is believed to be beneficial to real estate financing and will have a positive effect on the trading sentiment in the national property market.
“As for Macau, much of the bad news came at the end of last year, but there was no significant negative sentiment in the market, as Macau has built a solid economic foundation over the past decade or so,” he explained.
Centaline Property Macau indicated that as a result of the global pandemic, investment products have become riskier, especially in the last year where the stock market has been in turmoil and some blue-chip stocks have fallen by 30% to 50% in value. “Technology and education stocks, which used to be popular, and even takeaway stocks, which have become popular in recent years, have also fallen.”
In addition, the agency stated that in the face of the shrinking value of financial products, some investors have started to ditch stocks and purchase property.
“After all, the Chinese traditionally ‘love’ to buy ‘bricks and mortar’ and believe in its ability to retain value,” Centaline Property Macau added.
However, according to JLL Macau in its Macau Mid-year Review 2021, the property market remained stagnant with no significant improvement.
“Due to the Covid-19 pandemic, residential buyers in general have a bigger bargaining power and transaction prices are largely close to the appraised values. Coupled with the current low mortgage rate environment, it’s now a good time for homebuyers to enter the market,” comments Gregory Ku, Managing Director at JLL Macau.
“Though unemployment and underemployment rates remain high, we expect them to decrease when the travel restrictions between Macau and the neighbouring regions are eased or lifted, and [we expect] a further increase in residential demand,” Ku added.
