3Q real estate prices drop, Lao Pun Lap justifies current policies

2013-11-19

From：Macau Daily Times

The real estate market has seen a significant drop in the amount of transactions in the third quarter, after the laws regulating the pre-sale of buildings under construction and the intermediary activities of real estate agents took effect. The average price of all residential units has decreased 25 percent to MOP66,936 per square meter of usable area, according to official data.
The coordinator of the Policy Research Office of the MSAR, Lao Pun Lap referred to these statistics in order to further explain policies on property market control.
According to a statement released by the Government Information Bureau (GCS), Lao Pun Lap emphasized that figures provided by the Statistics and Census Service (DSEC) show that there has been a decrease in the trade of residential units.
“As shown, prices of real estate go up and down, adding DSEC mentioned that – in comparison to the period between January and September in the years of 2011, 2012 and 2013 – there has been a “continuous downward trend” in prices.
Moreover, he added that between October 2012 and September 2013, 96 percent of real estate buyers were residents of Macau, with the percentage of non-local buyers decreasing from 11.4 (in 2010) to 2.8 percent.
The figures were used by Lao Pun Lap to justify that “the existent measures to control the property market (…) have given certain results aimed at fighting the speculative atmosphere of the real estate market and the input of foreign capital.”
Lao Pun Lap’s comments follow those of the Chief Executive, Chui Sai On, who recently delivered his 2014 Policy Address, in which there were no specific measures to control the real estate market. In a press conference, Chui stated that the property market is strictly related to a matter of “supply and demand”, which inevitably influences its price.
Lao Pun Lap acknowledged that the risks of the real estate market are “not to be underestimated.”
Referring to 2011 census statistics, he emphasized that 82.3 percent of Macau residents live in privately owned houses – figures that had been referred to by Chui Sai On as well.
In his opinion, prices depend on a matter of “supply and demand” and the phenomenon does not only occur in Macau.
Lao foresees negative effects for buyers when the current low interest rates scenario changes in the future.
According to recent figures released by the Statistics and Census Service, there were 3,193 Stamp Duty records of building units and parking spaces being purchased and sold during the third quarter, worth MOP13.84 billion in total. Both numbers were down 51 and 59 percent quarter-to-quarter respectively.
There were 1,908 residential units that were purchased and during the third quarter in which the amount of pre-sale residential units purchased and sold had taken a dive, these dropped by 95 percent to only 90 units.
The average price of existing residential apartments, however, has risen 2 percent to MOP64,561.
The average price of residential units in Coloane recorded a 12 percent drop, in contrast to the respective 3 and 2 percent increase in the average price of residential units in Macau Peninsula and Taipa Island.
Additionally, the average price of office spaces soared 23 percent to MOP79,592 per square meter. The average price of industrial units only had a mild rise of 1 percent in 3Q to MOP34,637.
Construction of new buildings in the third quarter will provide the market with 439 units, 413 of which are residential, 4,794 parking spaces for cars and 1,502 parking spaces for motorcycles upon completion.

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