Macao’s property prices have dropped by about 40 percent since peaking in 2018, according to a recent report by the Macau General Association of Real Estate, cited by Macao Daily News.
Most of that freefall happened relatively recently. The report indicated that in the first half of June, the average square-metre price of a residential property stood at 65,618 patacas – down nearly 30 percent from the 92,439 patacas registered a year earlier.
The Association said this shows that the Macao government’s removal of property curbs last April had failed to halt the sector’s slide. It warned that the prolonged downturn was weighing on investment, consumer confidence and purchasing power, with “far-reaching socioeconomic repercussions.”
The report also noted that tens of thousands of buyers who purchased homes with 20 percent down payments in recent years had seen their equity “evaporate.”
[See more: Residential property price index falls further in the second quarter]
While the government has advised banks to not force sales in cases where the mortgage taker is able to make repayments, the report noted that banks do have the right to take such measures in cases where the market continues to perform poorly.
The association described this uncertainty as a “sword suspended over the ceiling” for homeowners. Adding to the strain, incomes among residents aged 45 and under have fallen significantly, putting home ownership further out of reach for many.
To help support the sector, the report called for the government to cut down-payments for homeowners from the current 30 percent to 15 percent. Other suggestions included relaunching a 4 percent interest subsidy scheme and the encouragement of home switching.
The association recommended a return to a simple, low-tax system, which would include charging 100 patacas stamp duty for residential property transactions valued at 4 million patacas or under, and levying a 1 percent surcharge for sales priced above 4 million patacas.
It also urged the government to attract high-income and well-educated talents to settle in Macao, and consider an investment residency scheme for foreign individuals who had lived in Macao for at least 7 years and invested 20 million patacas on local assets – split equally between commercial and residential properties.
In an interview with reporters yesterday, Stanley Au Chong Kit, the head of the Delta Asia Financial Group, said that the property market was unlikely to avoid further decline in the second half of the year, with banks expected to remain under pressure. Still, he noted that the delinquent loan ratio fell to 5.4 percent in June and could continue to ease over the next 6 to 12 months.
