Regional realtor confident in 2024 property market

Forecasting interest rates to fall in 2024, a regional realtor has expressed confidence in the rise of both transactions and prices across the property market.

Profitability should be expected in the property market for office, retail, industrial building and residential spaces, contingent upon falling interest rates, regional realtor Centaline Property’s Macau Office said in a statement yesterday.

Centaline forecasted a surge in the number of retail space transactions, particularly in Macau’s tourism districts, given that most first-tier shops in tourism and casino districts are currently under ownership.

Rentals for these spaces have returned to 70% and 60% of pre-pandemic levels.

Moreover, shop leases in tourism districts soared last year, with many interested tenants unable to secure their preferred spots. Coupled with the anticipated lower interest rates, the realtor believes tourism districts’ retail space prices will rise.

Although the Northbound Travel for Macau Vehicles scheme has impacted local businesses, the realtor expects a rise in transactions in residential districts, provided there is an additional 20% fall in prices.

In the office space sector, Centaline is also optimistic, believing an interest rate decrease will benefit business operators, who will ultimately need more office spaces.

Moreover, the loan-to-value ratio for office spaces may reach 70% or even higher, which will also incentivize transactions. Therefore, the realtor predicted that a further drop in the prices of office spaces is unlikely in 2024. Should there be a fall in interest rates, the number of transactions may even exceed that for other property types.

Residential units will also see improving conditions in 2024, largely because a new law adjusting restrictions on property transactions became effective from New Year’s Day.

The new law sets the maximum loan-to-value ratio at 70%. Further, those acquiring their second residential properties are not subject to additional stamp duty, signifying a significant easing of purchasing barriers to the market. With this, the realtor believed that the number of residential property transactions may potentially 2021 levels. Price drops in certain areas are possible but unlikely in traditional school districts.

A drop in interest rates will also potentially result in the price stabilization of industrial spaces. The realtor is also confident that prices and transactions within the mainland market will increase amid supportive measures and policies to be rolled out.