Real Estate Matters | Macau Property Review 2015

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.

Once again, the past year has been an interesting one for Macau and its Property.
The beginning of the year saw property prices dropping under the record highs of 2014 where property values had climbed between 40% and 60% (dependent on the property, where it is located, size etc).
Rental prices had also been on the increase from the previous year, and again the increment varied depending on which building and development you were in.
The biggest demand for rental property was in Taipa, where migrant workers flocked to try and avoid the logistical issues of buying a car or the horror of catching a bus.
At the beginning of the year, a nicely appointed 2 bedroom apartment in Taipa that does not have access to any facilities carried an asking price of $5,000,000 with a rental price range of $12,000 – $16,000.
Now that same 2 bedroom apartment in Taipa has an asking price of around $3,800,000 – $4,000,000 with a rental range of $9,500 – $13,500. In both cases a drop of around 25%
The same holds true for a 2 bedroom apartment in Taipa in a complex with common facilities such as a gym, swimming pool etc, the current asking prices are 25% – 30% lower than the same time last year.
As we go ‘up the ladder’ the more spacious and ‘luxury’ apartments have been affected to a somewhat larger extent, in some cases asking prices have changed by as much as 35%.
Here is a quick recap of the year in case you have been traveling on a spaceship or crossing a desert for 12 months;

The 8,649 low cost housing units (in a prime location) started to fill up as people took possession and moved to Coloane with their families.
Meanwhile the supply of new apartments into the market was around 2,000 many of which were located in One Oasis (Coloane).
The Population in Macau at the beginning of the year was approx 620,000. By the end of 2015 the government estimate is around 645,000. That’s an increase of up to 25,000 people.
Rental prices dropped by 15% – 30% from the start of the year.
Whilst the reduction in rents may appear to be in line with the general drop in property prices, it should be noted (especially by government officials!) that the root cause of the drop was simple supply and demand. The release of One Oasis and other projects onto the market meant that supply levels were high for once.
Property values dropped by 20% – 30% over the course of the year
The government announced a discussion on ‘rent control’ procedures despite past experience, when interfering with the free market had negative unforeseen and long lasting consequences.

Did the government get it right this year ?
Well the free market corrected property prices whilst the government is still talking about rent control, delayed border openings, a Taipa Ferry Terminal who’s opening date seems to get further away each year and a light rail system that has NO opening date, so you be the judge.

Advice offered in these articles are the opinion of the individual author. Readers should consult with qualified and experienced lawyers familiar with Macau Law on legal matters, and independent investment advisors on financial matters.

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