Real Estate Matters | Is it time to invest in Macau again? Or should we wait another year. Or two? (Part 2)

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.

Home sales have slowed, property prices are down. It could just be the right time to pick up a good deal.
Here are the other 5 considerations to take into account if you are thinking about getting back into the market.

6. You Have Some Protection Against Inflation
Over the long term, housing has tended to stay ahead of inflation by a small margin.
Its not a guarantee or a perfect model, but you will sleep easier knowing that as inflation kicks in and rents rise, the price of your own property is going up as well.
This type of financial ‘insurance’ is very important for families, and especially important for young families with children who must plan for the next 50 years of their life.
That sense of financial security is difficult to replace with any other form of investment.
Knowing the Macau government, there will always be schemes and incentives to help local Macau residents own their own property, and this may range from financial advice and backing, to straightforward cash handouts.

7. It’s Your ‘Capital’
Housing prices will go up and down.
Historically, there are 10 year fluctuation cycles, but these figures generally apply to the western world as opposed to Asia.
One way of comparing house prices with stock market investments is to think of it like this:
House prices are like a ship on the sea, and they move slowly and steadily up and down in comparison.
Stock prices on the other hand look more like a rocky mountain range, pitching up and down and sometimes falling off a cliff.
Paraphrasing an online article “If you have investment experience, you will know that stocks are incredibly hard for most normal people to own in large quantities for practical as well as psychological reasons”.

8. You Are Forcing Yourself To Save
We have given an example of this in earlier articles.
When you rent an apartment for HK$15,000 month instead of buying one for HK$4,000,000 and paying a mortgage of $20,000 per month, renting may make sense.
The question is, will you REALLY save the $5,000 difference for your own future?
Most people won’t.
In addition, the mortgage payment reduces the ‘principle’, in other words the amount of money you owe the bank.
In saving terms, paying a mortgage gives the long-term discipline required to build up a substantial investment.
9. Choice
There are a lot of homes for sale at the moment, especially above HK$4,000,000.
You have your pick, but it won’t last.
The market will turn around again and it will be difficult to strike a deal. Owners will hold on to their properties as prices rise, fuelled by the imagination and that primeval driver of mankind, greed.
Buying when others are fearful is always the best time to buy.

10. In time the market will recover and change
As the population of Macau continues to grow, so does the demand for housing.
With all the new developments on the Cotai Strip coming up, and the direct demand for labour that will be required, its not hard to see that the pressure on housing is going to increase.
Unemployment is currently below 2%, and Macau will need to come up with a workable strategy to import labour. Simply put, it can’t grow without more people to do the jobs.
More people mean more homes being rented and purchased.
The current slowdown in the housing wont last forever. The double effect of greater demand in a rising housing market is likely to make everyone look back at this period with regret if they missed the chance to buy…  again !

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