Property prices have “already” hit rock bottom but there won’t be a sharp rebound unless the city’s infrastructure and the economy are improved, Jones Lang LaSalle (JLL) Macau’s residential property chief Jeff Wong Chi Wai said on Thursday.
Wong made the comments during a media briefing at his office about the global real estate services firm’s Macau mid-year property review and forecast.
According to the company’s data, the capital values for high-end and mass-to-medium residential properties fell by 15.4 per cent and 14.7 per cent year-on-year respectively in the first half of the year, while their yields contracted to 1.6 per cent and 1.7 per cent year-on-year respectively.
In addition, with the decline in the number of work permits granted to expatriates from the professional sector, high-end residential rental values saw a big drop of 29 per cent year-on-year in the first six months, while the rental value for mass-to-medium residential properties fell by 24.6 per cent year-on-year with the completion of several new residential developments last year that boosted market supply.
Wong pointed out that there was a sharp increase in transactions in April and May because consumers’ buying power has accumulated, especially after property prices dropped to a “more attractive level”.
As about 80 per cent of the purchases were residential properties of 6 million patacas or below, Wong said this showed there is still demand for housing from small families.
“The capital value and pricing are still in the adjustment phase and we think that the worst time has passed,” Wong said, explaining that with the dearth of new supply of housing units this year, property prices have hit rock bottom.
Wong added, “It’s too optimistic to say there will be a sharp rebound but I would say that prices have hit the bottom already so we believe that the prices will continue to consolidate at the current level, say, within a range of five to 10 per cent.”
With prices down now, Wong suggested the government reconsider some of its property curbs, especially relaxing it for first-time homeowners where the down-payment is a major hurdle for them to buy property.
As for the next 12 months, Wong said the market would see more transactions for mid-range residential units because those cashing in from their flats in the six million pataca range would be looking to buy bigger units.
Rental value for offices has dropped by 14.5 per cent to 20.3 per cent year-on-year, which gave tenants bigger bargaining power, while companies are taking advantage of the relatively low rents to upgrade or expand their office space, according to the real-estate services giant headquartered in Chicago.