Group urges further cut to 15% down payment requirement

A Macau property group is calling on the government to reduce the general down payment requirement for local homebuyers to 15%, saying recent signs point to stabilization in the city’s cooling real estate market.

The Macau General Association of Real Estate believes lowering financing barriers could further stimulate activity.

“The current property market in Macau is characterized by low risk and abundant options for buyers,” president Chong Sio Kin told media recently. He said property owners are becoming financially stronger as inventory shifts between them. This can result to reducing systemic financial risks.

“Properties are shifting from ‘weaker owners’ to ‘stronger owners’, leading to a reduction in systemic financial risks,” he pointed out.

Recent data shows some easing of market pressures. The price index for residential property dipped 2% from February to April after peaking at 265.9 in early 2019 before the pandemic. It now stands at 222, according to government figures.

The association argues Macau should follow steps taken recently by large mainland cities. Shanghai lowered its standard down payment for first-time buyers to 20% from 30%. Guangzhou set the minimum at 15% while removing an interest rate floor. Shenzhen also dropped the minimum to 20% and established a 3.5% interest rate floor.

Currently, Macau maintains a 70% maximum loan-to-value ratio instituted at the start of 2024. This year saw the elimination of stamp duties on multiple property purchases and non-local buyers, measures aimed at propping up home prices.

Chong said further reductions in financing barriers, such as lowering the general down payment to 15%, could inject more momentum into Macau’s property sector by increasing affordable options. The association stated this could stimulate the local real estate market.  Staff reporter