Ho Iat Seng: Sandwich-class housing on hold due to lack of demand

The sandwich-class housing project, a concept that Chief Executive Ho Iat Seng introduced to Macau after taking office, will be halted temporarily due to lack of demand, Ho told the Policy Address Press Conference yesterday evening.

In justification for the decision, he cited that the recent application round for Economic Housing or Subsidized Housing has not proven very popular, leading him to believe that there is no sandwich class.

When the demand is less than the supply, the application process continues and nobody misses out.

He even stated that before the launch of the sandwich-class housing plan, there was a sector of people who were not able to access Economic Housing due to a variety of reasons. “We listened to the community and tried to take care of these applicants,” Ho said.

Regardless of the current demand, he added, the government must continue to plan ahead and prepare for the project. Apart from the land on Avenida de Wai Long that has been announced as the location for the sandwich-class housing project, there are several other locations reserved, Ho disclosed, adding that all planning has been put into place.

He underlined that when the demand is must weaker than the supply, public funds should not be wasted on building the project.

However, the government will monitor market changes. When demand returns, the project can recommence anytime.

On the loosening of the restrictions on real estate market, he reiterated that the recent announcement concerned lowering stamp duty to the 2009 regime. This loosening is the outcome of a multitude of evaluations and discussions, Ho explained.

The outgoing measures have distorted the pricing of real estate, especially smaller units, he said, which were on average 20% to 30% more expensive than larger units in the same development. This occurred because sellers wanted to take full advantage of the measures, he explained, referring to the lowering of loan to value ratio (LVR) from 90% at maximum to 70%.

He was not happy about the situation because the units existed in the same building and used the same building materials. Young people suffered from higher prices, he said. “Although you can get access to a higher mortgage, the downside is, you need to repay more,” he said.

On Economic Housing, he pledged that the number of units to be built will shrink in order to keep the promises made by his predecessors. There will be 32,000 government housing units and 4,000 private housing units on New Urban Zone A, he added. He believed that the next government will follow suit. He did not, however, reply to whether he will run for re-selection.

He also explained that each application covers only five projects, as the government needs to be able to respond to market changes. University of Macau has been commissioned once again to evaluate the required number of Economic Housing units.

Economic Housing, he believes, will not have a significant impact on the property market because it has no investment value. At the end of use, the owners can only resell it to the government.

Chamber of Commerce to submit reports to govít on SME assistance

The Macao Chamber of Commerce will soon submit a report to the government with “practical suggestions” to assist local SMEs, Ho disclosed to the press conference.

He was questioned if the government has any additional measures to help local SMEs, who have often complained about difficulties in the market. Underlining that the Policy Address text has extensively elaborated on the topic, Ho admitted that not much additional work can be done.

Nonetheless, the chamber of commerce is working on a report to offer practical and viable suggestions. Suggestions such as operational transformation and development have become cliched, he hinted, but the key is to implement viable policies.

The head of the government admitted that many SMEs have experienced an even tougher environment after the resumption of normal travel. During the pandemic, he said, people were virtually confined in Macau with the minimal travel, which had benefitted local SMEs.

After the resumption, he further explained, many local people – especially those living in the Northern District which is only a checkpoint from mainland China – have chosen to spend their free time in neighboring Guangdong Province instead of Macau, leaving local SMEs struggling for business.

The official added that the Northern District has no story to tell and not very appealing to tourists.

Ho hopes local

SMEs follow pay rise

The government has proposed that in the coming year, all civil servants will receive a pay rise of 3.3%. When asked if it will further entice young people to be overly focused on working in the government and further drawing workforce from local SMEs, Ho believes it will not, citing the civil servant recruitment cap as the reason.

In addition, he commented that 3.3% pay rise is not much for civil servants, because their salaries have not been increased in the past three years. “It is only about 1.1% each year [if the last three years was taken into account],” he said.

The pay rise should be facilitated because it was proposed by a topical committee and “the government should respect the proposal,” he said. He also does not think civil servants are very highly paid. “Some employees in private companies earn much more than civil servants,” he commented.

He believes that local SMEs will try to give a 3.3% pay rise so as to retain stability in their  workforce.