Int’l realtor hopes gov’t lifts all cooling measures

Foreseeing a tough real property market in Macau in 2024, an executive at an international realtor suggested yesterday the government fully lift its cooldown measures.

Late last year, the government announced its decision to lift partially from Jan. 1 this year the then-enacted cooldown measures, such as the 5% additional stamp duty on the purchase of second residential properties. The decision was turned into law later and subsequently enacted on the aforementioned date.

Alongside the change, the unified cap of a 70% loan-to-value ratio for residential properties and the cancellation of the mortgage scheme for the first-time young homebuyers were enacted at the same time.

Commenting on that, Oliver Tong, general manager in Macau and Zhuhai for JLL, told a press briefing yesterday that although the measures could help alleviate the cost burden for residents when buying new properties, the cancellation of the first-time buyer mortgage scheme has put new pressure on residential units with transaction prices of MOP8 million or below, as the reduced loan-to-value ratio has affected their affordability.

“In addition, recent fluctuations in interest rates and the stock market have led to a reduction in local residents’ wealth. The government should consider lifting the cooling measures entirely to salvage the fragile real estate market,” Tong said.

Despite saying so, the realtor does not foresee a strong inclination towards a boost in the market even if the government lifts all its cooldown measures. Therefore, he further suggested relaxing investment thresholds for Macau’s property market in the surrounding areas to stabilise the healthy development of that market and promote integration with the Greater Bay Area development pattern.

When asked if there is a trend that larger retailers are relocating from tourism districts to traditional neighborhoods, Tong said there has not been much of a trend like this. Although some global caterers have inaugurated shops in traditional neighborhoods, international retail chains are not inclined to consider this.

“Retailers and caterers in these neighborhoods have been struggling to survive amid local people spending outside of Macau,” he concluded. Tong expects rentals for both high-end and below high-end residences to rise up to 5% this year. As for capital value, high-end residences are expected to remain stable, while below high-end properties may fall by 5%.

Retail is the only sector that recorded better performances last year, Tong added.

“Due to the slow recovery of the external economy and the government’s move out of the private office market, we expect that the office market will continue to decline in 2024,” Matt Kou, senior manager of leasing, said. “The lower rent environment will stimulate more office leasing relocation activities, which is expected to break the past shortage of Grade A office buildings in Macau. Tenants will take advantage of this opportunity to reduce costs and improve office quality.”

With property upgrading part of JLL’s business, Kou was asked if the agency will suggest local office space owners upgrade their premises to support their rental levels and attract new comers.

In response, he said many global corporations take seriously matters relating to Environmental, Social and Governance (ESG), due to progressive requirements from monitoring authorities or entities.

As such, he posited, these corporations will only look to office spaces with ESG certifications. Although this is not yet popular in Macau, the realtor suggests local landlords at least upgrade their properties for perception and commercial reasons.

Mark Wong, director of value and risk advisory in Macau, expected the property market to be similarly tough as last year, “given the volatile external environment.”