Economy chief blames borrowers for unpaid mortgages

People should exercise caution when purchasing real estate, and be aware of the possibility they can’t support such a financial burden, Secretary for Economy and Finance Lei Wai Nong said on Friday in the Legislative Assembly, where he was replying to lawmakers’ inquiries.

“People, while acquiring a housing unit, must take into account their financial capacity. This is a very important decision in people’s lives,” Lei said while replying to an inquiry from lawmaker Ip Sio Kai.

According to the Secretary, in the first half of 2022, residents submitted around 4,000 applications for the suspension of bank loan payments, most of them involving housing mortgages.

Lei added that the real estate market is very sensitive and closely linked to the current economic situation, calling on residents to better evaluate their finances before buying a house.

In the inquiry, lawmaker Ip, who is also the president of the Macau Association of Banks, in light of the significant amount of unpaid loans, called on the government to impose stricter measures on residents accessing credit to acquire real estate.

In response, Lei said that the government is not currently considering adding more restrictions in that area, noting that when similar measures were enforced in 2017, this was due to an excessively “hot” real estate market and done to avoid buyers falling into excessive debt. The measures, enforced since that time, set rules to ensure that people applying for mortgages have enough financial capacity to support their repayments. This is no longer the case for many due to the higher unemployment rate as well as cases of reduced hours and long-term unpaid leave used indiscriminately by companies, with the backing of the government which has said that is legal to do so.