Property | Pre-sale residential purchases soar despite ongoing Pearl Horizon scandal

The ongoing Pearl Horizon controversy has not made a dent in the number of purchased pre-sale residential units within the Macau market, which soared almost 220 percent quarter-to-quarter in the final three months of last year to a total of 803 units.

The ongoing controversy – which still appears to have no end in sight – has not deterred other buyers from purchasing pre-sale residential units.

According to information released yesterday by the Statistics and Census Service (DSEC), the transaction volume of pre-sale residential units in the fourth quarter of 2017 increased nearly 220 percent, while their value was up more than 200 percent to MOP7.36 billion.

Many of the purchased pre-sale residential units were in Novos Aterros da Areia Preta (286), Baixa da Taipa (200) and Fai Chi Kei (170).

Purchases of existing residential units dropped by 22 to 1,815 units, though the transaction value increased 4.3 percent to MOP10.41 billion.

In terms of average price per square meter of usable area, the average price of existing residential units (MOP90,047) and pre-sale residential units (MOP137,586) decreased by 2.1 percent and 5.2 percent respectively quarter-to-quarter.

However, the overall average price of residential units grew by 6.4 percent to MOP105,654 as the proportion of generally high-priced pre-sale residential units as a share of the total transaction volume of residential units (30.7 percent) rose significantly by 18.7 percentage points.

For the whole year of 2017, the number of residential units and parking spaces sold and bought dropped by 0.9 percent year- on-year to 13,985, whereas the transaction value increased 15 percent to MOP85.23 billion. Of this amount, the transaction value for pre-sale residential units (2,043) and existing residential units (8,538) totaled MOP20.41 billion and MOP49.04 billion respectively.

The average price of residential units was MOP100,822 per square meter in 2017, up by 16.8 percent year-on-year. The average prices of those in the Macau Peninsula (MOP91,769), Taipa (MOP115,160) and Coloane (MOP128,205) rose by 18.8 percent, 16.7 percent and 15.7 percent respectively. During the same period, the average prices of existing residential units (MOP90,412) and pre-sale residential units (MOP137,597) increased 15.7 percent and 16.3 percent respectively year-on-year.

In regards to construction in the private sector, at the end of 2017’s fourth quarter there were 20,529 residential units in the design stage, 9,324 under construction and 1,295 under inspection.

The Pearl Horizon controversy has been one of the most widely publicized cases related to land issues since the 1999 handover.

Project developer Polytec Asset Holdings failed to construct a large number of residential units on a plot of land in the north of the peninsula, before the local government repossessed it when the concession expired in December 2015. This left dozens of pre-sale buyers out of pocket, leading to a lengthy judicial battle and numerous street protests over the last few years.

Polytec blames government bureaucracy for its failure to develop the plot in a timely fashion. Its chairman, Or Wai Sheun, claimed prior to the concession expiry that the MSAR government had been reviewing the residential complex’s architectural plans for seven years, creating an impasse for the developer.

Last month the MSAR government said it had a basic plan in mind for the development site, but that it would wait to disclose the details “in order to protect the interest of the small buyers under the terms of the Land Law.”

Just a few weeks later, the Court of First Instance made its first ruling on the case, deciding that the developer should reimburse more than MOP2 million to an individual who purchased one of the pre-sale residential units.