Juliet Risdon
Juliet Risdon is a Director of JML Property and a property investor.
Having established the company in 1994, JML Property offers Investment Property & Homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.
As the construction continues and the launch dates for the new resorts are getting closer, the human resource departments step up their hiring.
When people are hired, the first thing they must do is find an apartment in which to live. Consequently, even though prices are at a record high, the demand for rental property is on the rise again.
There is still a great deal of empty property in Macau. Many owners who purchased for ‘investment’ prefer to keep the property empty rather than lease it out for a number of reasons:
Owners believe it is easier to sell a property when its empty.
Owners don’t want to go through the ‘hassle’ of finding and dealing with tenants
Owners want to protect the interior, and don’t want to risk any damage
Empty properties are a bit of a problem to everyone.
Whilst there is a scarcity of good rental property in Macau, these empty properties have the potential to ease the property shortage.
An empty property also means that the owners are missing out on rental revenue, and that these empty properties can fall into a state of deterioration quickly, devaluing the building for people living there.
The rental demand is rising again, but the supply has not grown nearly enough.
As prices rise, the government becomes increasingly concerned with the fate of the local population, and tries to find ways to keep the cost of housing affordable for the masses.
So far, its been a losing battle.
It doesn’t have to be that way. Every problem faced by owners with vacant apartments can be solved. For example;
Many owners who buy investment property welcome an established revenue stream from tenants. It’s a bonus rather than a problem
Rental contracts can be structured to allow viewings so that the property can be sold. The compensation can be a lower rent, or some money back to the tenant
Employing an apartment management company can remove all of the problems of dealing with the rental process. The management company are the ‘Owners Representative’.
Agreements can also be structured to return the property to its original state when the rental agreement finishes.
Of course, many owners are unaware of these options, and in the immediate future it looks as though rental prices are set continue rising, which is bad news for tenants.
Until a solution is found to the vacant apartment issue, the government is unlikely to be able to suppress housing prices.
We continue to wait to see what happens now that the cross-border cooperation between Macau and Hengqin Island has been agreed, effectively making Hengqin part of Macau in years to come.
It may at last give the government the vital space required to keep housing affordable as the Macau boom continues.
Other potential solutions for the Government ? An Empty Property Tax.
Whilst it certainly warrants further investigation, an Empty Property tax would give the government the upper hand whilst not interfering directly in market prices.
It would allow the government to impose an increasing levy on vacant apartments should they remain empty and therefore force owners to use properties for their original purpose; as homes.
The tax would effectively increase the amount of supply in the market, and do so in a period of months rather than years.
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