Housing | JLL calls on government to implement ‘property ladder’ for home upgrading

Real estate firm JLL Macau is calling on the government to focus on social housing, and to take economic housing as supplementary when formulating public housing policies rather than imposing new restrictions or measures.

The firm urged the government to set up a ‘property ladder’ that provides opportunities for home upgrading – for example, moving from the public housing segment to private housing.

Managing director of the firm, Gregory Ku, suggested that the government should work on solving the region’s long-term housing problems using sustainable development principles by re-examining the existing ratio between social and economic housing.

“Given that Macau doesn’t have land supply or good planning for future land supply, the total supply for social housing or public housing, which is 49,000 – [should be] well planned,” Ku said, during a press conference held by the firm.

The managing director proposed that these housing units therefore should be available as leasing units in different categories rather than simply putting them up for sale to applicants.

“Once sold, you don’t have new supply [to replace it]. But if you lease it, once the occupants have income and improved housing income, they can go out into the private market to buy,” he added.

JLL believes these measures would mean that housing is more adaptable, which is especially important given the small size of the region.

Under the current system, owners of public houses must own the unit for 16 years before being able to sell it to the market.

The real estate and consultancy firm considered this timeframe too long, adding that owners should release their property back to the public housing pool once they vacate their premises, rather than sell it to the private market.

Meanwhile Jeff Wong, head of residential at JLL Macau reiterated the importance of addressing the issue of housing shortage through setting up regular land sales programs in accordance with other measures.

The executive believes that one of the reasons why property prices continue to surge is due to the “rational expectations” of the public. To evidence this claim, he cited the public’s awareness of the land shortage, which causes property price growth in the future.

The total residential sales transaction volume in Macau continued to grow in the second half of 2017, while for the leasing market, rental values for high- end and mass-to-medium residential properties grew by 8.4 percent and 8.1 percent year-on- year respectively.

Wong recalled that the mortgage ratio tightening measures targeting non-first-time homebuyers, which the government implemented in the first half of 2017, have not proved sufficiently effective.

Wong also mentioned the unsuccessful initiative proposed by the government at the end of 2016; the government announced it would put some sites up for sale by means of public auction in 2017 but this did not eventuate.

“To address the problem of housing shortage, perhaps the government can consider setting up regular land sales programs, promoting urban renewal and refining the procedures and timeline requirements on construction work,” he said.