24 Jul Trade war deeply impacting local residential market, lack o…
Residential sales transaction volume in Macau dropped significantly in the first half of this year due to the impact of the US-China trade war in investment sentiment, real estate service firm JLL Macau announced today.
According to data from the Financial Services Bureau (DSF), the number of residential sales transactions dropped 42.2 per cent year-on-year to a total of 3,920 sales.
Meanwhile, developers were said to have adopted a wait-and-see approach in the first quarter of the year, and only launching their projects in the second quarter, with pre-sale transactions falling 14.7 per cent year-on-year in the first half.
With cheaper options on offer for Macau buyers in the Zhuhai real estate market, local developers were attempting to attract buyers by offering mortgage and interest rate packages in pre-sales of first-hand properties.
“The number of new residential units launched for sale has peaked in recent years amidst intensive competition among developers. Due to external economic uncertainty and the easing home purchase policy in Zhuhai, local developers are facing difficulties to adjust upwards the asking prices of their new projects and need to offer various incentives to boost sales,” the Senior Director of Capital Markets at JLL Macau said today.
Meanwhile, the JLL Macau Managing Director, Gregory Ku, warned that the local residential market was expected to face challenges due to a “very limited” supply in the short, medium to long term.
To underscore this point Mr. Ku noted that in the first quarter of this year only 7,652 residential units were under construction and were expected to enter the market in the next three years, but with more than 2,000 units having already been sold in pre-sales.
The JLL Macau Managing Director also noted that the number of residential units in the design stage totaled 14,572 but with this number including the development schemes under the Ilha Verde Urbanisation Plan and Northern Taipa Urbanisation Plan, which were unlikely to start construction in the short to medium term.
“If this is not solved in one or two years, there will be no supply in new buildings available in the market […] The government should proactively find ways to increase land supply and speed up the process of urbanization to prevent Macau’s property market from facing the dilemma of discontinuity of supply,” he added.
With local authorities focusing on the development of public housing to solve the lack of housing in Macau, Mr. Ku stated the government “should not forget the private sector”.
“Public housing has restrictions, limits, and boundaries for different income levels. There is a big demand in the private sector for people looking to upgrade their home from one-bedroom to two-bedrooms,” he noted.
The JLL Macau Managing Director also urged authorities to speed up legislative works concerning urban renewal as many residents, especially those living in the Macau Peninsula, looked to upgrade from older buildings to new residences.