Juliet Risdon
Five more facts about Macau property that you may not already know….
11. RENTAL YIELDS IN MACAU ARE VERY LOW
Rents may seem high at times, but rental yields in Macau are some of the lowest in the world. Why?
In an over-simplified answer, other major cities around the world have diverse but mutually beneficial industries such as finance, educational institutions, advanced healthcare facilities and the like.
Macau has none of these industries, which incidentally also require skilled and well-paid professionals to run them.
Instead, Macau has only casino’s and hotels, and whilst service professionals may earn reasonable salaries, they are certainly not enjoying the six figure bonuses that come hand in hand with industries such as banking and finance. As such, housing budgets tend to be on the low side despite a high demand for housing.
12. RENTAL INCREASES & LIMITS
The rent may be adjusted once the agreement comes to an end, and there is no ‘cap on the amount that the rent may be adjusted both up or down (the government recently rejected a proposal that would have led to rent control measures).
In some countries, the amount that rents can be increased is limited to a certain percentage; say 10 percent for example. However in Macau, once the agreement comes to an end all subsequent agreements are treated as a new agreement.
13. WHY MANY OLD BUILDINGS IN COLOANE & TAIPA ARE FALLING DOWN
If you have looked at the old sea front buildings in Coloane Village or the low-rise houses in Taipa Village and wondered why they are not fantastic restaurants, trendy cafés or just extremely nice houses, you are not alone.
There are two reasons that the properties have remained in a similar condition for such a long time.
The first is that there is no clear legal title on some of the properties. Property ownership on the islands of Taipa and Coloane is slightly different from Macau peninsula, and many of the village properties do not have a legal binding title.
Buying a property under these circumstances represents a great risk for the buyer, who would not be able to secure bank financing because of the legal issue.
The second reason is because some of the buildings are ‘protected’. Now that should be a good thing shouldn’t it?
Well in this case, protected means that it is not actually protected and maintained, but rather that it cannot be ‘improved’ unless `it becomes dangerous and unstable.
Hence, owners are incentivized to leave the buildings until they fall down after which they can build a nice, new building… crazy, but true.
14. THE RESPONSIBILITY TO MAINTAIN THE APARTMENT.
The responsibility to maintain the infrastructure, such as the water, electricity, sewage etc belongs to the landlord.
He or she must maintain these elements to a reasonable standard unless some other provision is made explicitly between the two parties.
The upkeep of the apartment itself is the responsibility of the tenant, who must hand back the apartment in the same condition that it was handed over in.
This even includes cleaning the apartment before leaving if it was handed over in a clean state at the beginning.
15. WHEN YOUR NEIGHBOR CAUSES DAMAGE TO YOUR APARTMENT
When a neighbor causes damage to your apartment through a burst or leaking pipe for example, they are duty bound to fix the problem but are not obliged to fix the damage it has caused.
Apartment living can be hazardous, especially if the block is old and in need of attention, and this would help to explain the reluctance of some people to move into older buildings no matter how well appointed they are.
Next week: the Top 5
Juliet Risdon is a Director of JML Property and a property investor.
Having been established 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.
www.JMLProperty.com
info@JMLProperty.com
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