First-time homebuyers dominate property market

Jeff Wong (left), Gregory Ku (second from right) and other JLL executives

Real estate agencies said that the implementation of regulatory measures for the residential market in February significantly curbed property speculation and first-time homebuyers dominated the market.

The total residential sales transaction volume in the SAR continued to grow in the first half of the year, as potential buyers sought to enter the market before the regulatory measures took place.

According to JLL Macau, the number of transactions in January reached 1,986, a surge of 207.9 percent year- on-year.

During the first half of the year, a total of 6,790 residential sales transactions were registered, up 16 percent year-on-year.

In its mid-year property review yesterday, JLL Macau noted that many developers launched their projects for sale before the new regulatory measures came into effect.

A total of 2,513 pre-sale transactions were recorded, accounting for more than 37 percent of the total residential transaction volume, higher than the yearly average of about 20 percent in the past few years.

Also, more than eight pre-sale projects and new completions were launched in the first two quarters.

The high-end residential rental index recorded a 15.6 percent year-on-year increase in the first half of 2018, while the rental index for mass-to-medium residentials surged 17.5 percent compared to last year.

Meanwhile, in the rental market, the rental values for high-end and mass-to-medium residential properties grew by 9.9 percent and 8.6 percent respectively compared with the end of 2017. This growth was supported by the increase in imported labor numbers in the first half of 2018 and the improved performance of the gaming sector’s VIP market, as well as the rising rental numbers in the NAPE and Taipa areas.

“We all know that locals have their own leased properties already. The rental market is more or less focused on expatriates or those imported laborers,” said Jeff Wong, head of residential properties.

“Those expatriates are working in the gaming sector and in VIP-related business, so the recovery of the VIP gaming sector definitely will generate more demand for labor or imported labor or for expats. There will be wide demand for rented residential housing,” Wong explained.

In the first half of 2018, the government implemented a series of real estate regulatory measures, including the introduction of a new stamp duty rule on the acquisition of second properties and above.

Roy Ho

These measures included the relaxation of the mortgage lending ratio for young Macau residents who are first-time buyers, and the removal of leased housing as an exemption to the vacant residential property tax, along with the implementation of the ordinance on real estate leasing.

“The government is now actively working on its urban planning process, and the tender for the urban renewal research consultancy project is also in progress.  All of these measures will help promote the healthy long-term development of the real estate market in Macau,” said Gregory Ku, managing director at JLL Macau.

“We look forward to increased availability of real estate information to the public in the future,” Ku added.

Meanwhile, Centaline Property predicts that two-bedroom and three-bedroom units will be concentrated in the third quarter.

In a media briefing yesterday, the real estate agency said that the quarterly property market will show a steady decline in price, and total amount of transactions will increase. It forecasts that there will be a 15 percent increase in property prices this year.

Commenting on whether a vacancy tax could be imposed in Macau, similar to what Hong Kong is working on, Roy Ho, director of Centaline Property, implied that this could lead to a property price increase.

“I suggest that we evaluate this issue differently. This is because in Macau’s real estate market, the demand for housing is currently higher than the supply,” Ho told the press.

“I suggest more regulations on housing issues, such as the regulation that came out earlier this year which successfully reduced the investment demand. [I also suggest] tackling several problems with one regulation in order to favor the development of the real estate market in Macau further,” the director added.

Ho noted that the Hong Kong government is trying to increase land supply in order to solve the problem of housing shortage, adding that they are trying to withdraw housing ownership from second-hand ownership.

The neighboring region is also considering converting industry buildings into temporary housing the solve the issue of sub-divided flats.

“The real estate problem in Macau is definitely not as difficult as in Hong Kong. In terms of land supply and regulations, we definitely have the conditions to do more things to solve the problems in the housing market,” he said.

Wong calls for older residents to sell vacant homes

Jeff Wong, JLL Macau head of residential properties, said that many locals invest in real estate as there is no stock market in Macau. He also noted that there is a lack of housing availability that is difficult to solve. Consequently, many smaller houses belong to older people and “can be made accessible to younger people.” The JLL executive said that the government should explore “a next stage to convince owners to sell these houses.”