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Home prices down 30 pct, no sign of growth in second quarter

Housing prices have dropped 30 percent from their peak and there is no sign of growth in the number of transactions, supply or price during the second half of this year, Ricacorp Macau Managing Director Jane Liu Zee Ka said on Wednesday. Liu made the remarks during a press conference at the Emperor Hotel in […]

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Housing prices have dropped 30 percent from their peak and there is no sign of growth in the number of transactions, supply or price during the second half of this year, Ricacorp Macau Managing Director Jane Liu Zee Ka said on Wednesday.

Liu made the remarks during a press conference at the Emperor Hotel in Zape about the outlook of the property market. Ricacorp is one of the largest real estate brokerages in Hong Kong and has branch offices in Macau and the mainland.

Liu said that since the housing market is determined by the city’s economic situation, “I don’t see any reasons that there would be a big drop or big rise in prices in the second half of the year.”

“Large-scale infrastructure projects such as the Hong Kong-Zhuhai-Macau Bridge, the new land reclamation plan and light rail transit will help Macau’s economy but they are not going to be ready for use in the next half of the year, plus the fact that there is no progress in the supply of new flats, the housing market for the next half of the year will just be the same as the first half,” Liu said, adding that as land resources are limited, property prices would be maintained at a certain level.

Macau’s land area covers just 30.3 square kilometres, or 2.7 percent of Hong Kong’s. Macau’s population of around 640,000 amounts to nearly 9 percent of Hong Kong’s.

“Owners are not going to slash prices to sell off their properties,” she said.

Instead, Liu suggested the government adjust its property cooling measures, such as relaxing the mortgage requirements so that buyers can borrow more and pay a smaller deposit and abolish the Special Stamp Duty (SSD), which was introduced in 2011 and imposes a 20 percent stamp duty on the seller for the transfer of property ownership within the first year after the purchase date and 10 percent in the second year after the purchase date.

“The current economic situation is different to before. As the economy is slowing down, the government should review the SSD temporary measure so as to increase supply in the market and let housing prices adjust themselves,” Liu said.

Besides the 30-percent drop in housing prices from their peak, prices for shops and offices are also down.

According to Wednesday’s presentation, rental prices for flats in Taipa have dropped 13 to 15 percent from their peak, and as the gaming business is down, some gaming promoters are letting out large numbers of flats located near the casinos on the peninsula, according to Ricacorp.

According to Ricacorp, the rents in One Central Residences have dropped almost 40 percent, from the highest HK$27 per square foot last year to HK$16 per square foot now.

In addition, there is a “wave of empty shops” in popular tourism hotspots, with sales and rental prices for shops in the west Nape area dropping by between 20 and 30 percent. For units in industrial buildings, prices are down 20 percent. Although rental rates for offices, for example, in Nape have dropped nearly 25 percent, the real estate company forecast that the figure will rise 5 to 8 percent this year because of the continuous increase in new companies looking for premises.

(macaunews/macaupost)

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