Property prices will face a downward correction, with local Jones Lang LaSalle (JLL) representatives yesterday forecasting a drop of up to 10 percent in prices of residential and retail units.
The local office of the global real-estate services firm held its Macau Year-end Property Review 2018 press conference yesterday at its office in the Finance and IT Centre.
“For the residential market, our view is that it’s not so optimistic,” JLL Macau’s residential property chief Jeff Wong Chi Wai said when asked for a forecast of the local real-estate market.
Wong said that the capital values for high-end and mass-to-medium residential units would drop 5 to 10 percent and up to 5 percent respectively this year, while rental values in general would remain stable as the demand is still supported by imported workers hired for gaming facilities and infrastructure projects.
Wong said that since the government launched a new round of curbing measures last year, including imposing a new stamp duty on buyers acquiring more than one residential property, almost all speculative activities had been removed from the property market.
“There’s another measure that helped young people buy their first home last year, where young first-time buyers are eligible to a higher ratio of mortgage lending when purchasing a residential unit valued below 8 million patacas,” Wong pointed out, adding that this had further increased demand in the property market, where the capital value index of high-end and small-and-medium sized homes went up 3.5 percent and 7.8 percent respectively last year, while the rental index increased 17.2 and 12.2 percent respectively because of the record-high amount of non-resident workers last year.
The figures are based on JLL Macau’s own real estate data.
Wong also said that due to the fact that demand from first-time homebuyers eligible for a higher ratio mortgage and the supply of residential units valued below 8 million patacas had been absorbed by the end of last year, in addition to the availability of 4,000 public housing units this year, the residential transaction volume might stay at the low level in the near term while transaction values may fall a bit, although not substantially.
JLL Macau Managing Director Gregory Ku Ka Ho added that under the latest curbing measures, while they have helped young people buy their first home, it was not helping people who want to upgrade to a bigger home because they could only apply for a mortgage of up to 40 percent and have to pay an additional stamp duty of 5 percent.
“This has created difficulties for end-users to upgrade and at the same time significantly reduced residential supply in the secondary market,” Ku said, pointing out that residential units with two or three bedrooms are generally priced at over 8 million patacas.
“We hope the government would review the guideline and adjust the set property value to 12 million patacas so that it could alleviate the problem of supply shortage in the secondary market,” Ku said.