Property transactions were slow in the first two months of the year and as speculators are leaving the market they are dropping their asking price by over 20 percent, which has attracted buyers to pick up bargain properties, Centaline (Macau) Property Agency Senior Regional Sales Director Noel Cheung Lai Wah said Wednesday.
Cheung also said that official data were expected to show that the number of transactions went up in March and that prices would show a five to 10 percent growth in the second quarter.
The local office of the Hong Kong estate agent held a press conference to give a quarterly review of the local property market on Wednesday.
According to the agency’s data based on its sales, high-end properties such as One Oasis recorded 55 deals in the first quarter, with an average price of HK$7,633 per square foot. The average selling price of a residential complex opposite Seac Pai Van Park was HK$8,263 in the previous quarter. The selling price reached as high as HK$9,484 per square foot in February last year.
Cheung said the drop was due to potential local buyers investing outside of Macau and the slowdown in the local economy at the end of last year but as new residences have got government approval to be sold and some home-owners are no longer bound by the Special Stamp Duty (SSD) measure, the property supply was growing and as prices have dropped slightly, people were buying again.
The SSD is one of the government’s property cooling measures implemented in 2011 that imposes a 20 percent stamp duty on the seller for transfer of property ownership within the first year after the purchase date and 10 percent in the second year after the purchase date.
“[Speculators] are not going to mortgage their properties so as it’s time for them to leave the market and they are dropping the selling price by over 20 percent, which has attracted buyers to buy at bargain prices, and that has pushed up transactions and prices will catch up too,” Cheung said.
Based on this situation, according to Cheung, the number of transactions in March may have reach about 800, a 155 percent growth from February’s 313 transactions.
“We estimate that there were about 1,400 transactions in the first quarter and the price for high-end properties saw a five to 10 percent growth in the second quarter,” Cheung said.
Centaline (Macau) Director Jacky Shek Po Tak said that the opening of Galaxy’s second phase next month, Studio City’s opening later this year and the Venetian’s The Parisian next year would stimulate tourism, in turn benefitting overall economic development.
According to official statistics, property prices in February rose four percent from January. Shek said he estimated prices last month rose another three percent from the previous month.
“There was an adjustment in property prices because there was a lack of direction in the economy, but as we can see, the worst is over and there is very little chance that the prices will drop any further,” Shek said, adding that people who either want to enter the market or want to move to a better quality flat should take the opportunity to do so now.