Macau's Real Estate Market Faces "Vicious Cycle" of Deterioration

Strategic Insights -

Macau's housing market has been experiencing a significant decline in property prices, leading to a loss of consumer confidence and investment sentiment, according to the General Association of Real Estate of Macau. The organization has warned that the downturn has intensified, with no signs of a reversal, and has urged the government to introduce stronger measures to stabilize the market. The association has proposed a series of fiscal and policy measures, including lowering the minimum down payment requirement and offering subsidies for down payments, to ease pressure on buyers and stimulate demand.

Key Takeaways:

  • The General Association of Real Estate of Macau has warned of an "abrupt fall" in residential property prices in Macau, with a decline of more than 40% since the peak in 2018.
  • The average residential price per square meter in Macau has dropped from MOP92,439 in the first half of 2024 to MOP65,618 in the first half of this year, representing a year-on-year decline of around 30%.
  • The association has called for the government to introduce stronger measures to stabilize the market, including lowering the minimum down payment requirement to 15% and offering subsidies for down payments.
  • Thousands of buyers who purchased homes with 80% bank financing have seen years of mortgage payments wiped out by the decline in property values.
  • The association has proposed reinstating a 4% mortgage interest subsidy for homebuyers and lowering transaction-related costs such as stamp duty, notarial and deed fees, and other property taxes.
  • The association has renewed calls for an investment immigration scheme, suggesting granting residency rights to individuals who have lived in Macau for seven years and hold at least MOP20 million in assets.

Statistics:

  • The average price per square meter in the first half of June was MOP65,618.
  • Prices have declined by more than 40% since 2018.
  • The year-on-year decline is around 30%.
  • The average residential price per square meter in the first half of 2024 was MOP92,439.
  • The association recommends lowering the minimum down payment requirement to 15%.
  • Thousands of buyers have seen years of mortgage payments wiped out by the decline in property values.

Sources:

  • General Association of Real Estate of Macau (no date provided) - "Impact of the Expansion and Recession of the Real Estate Market on Macau's Economy and Society."
  • Financial Services Bureau (no date provided) - Data on average residential prices per square meter.