Sale of unfinished units plummets in June

2013-8-21

From：Macau Daily Times

Figures released by the Monetary Authority of Macao have revealed a freefall in residential mortgage loans (RMLs), collateralized by uncompleted units in June. The total has dropped 97.5 percent month-to-month to MOP9.3 million, and represents a 93.6 percent decrease compared to last year. The downturn coincides with the implementation of the law regulating the pre-sale market.
In general the number of new RMLs also saw a 27.8 percent month-to-month fall to MOP3 billion, which is 25.7 percent less than the same time a year ago.
Despite the decline in RMLs, the amount of new commercial real estate loans (CRELs) grew 46.9 percent to MOP 3.9 billion, 76.1 percent higher than the figure for June 2012. New CRELs to residents rose a significant 42 percent.
As for the figures on outstanding values of RMLs, the total has reached MOP106.4 billion, an increase of 27.3 percent from a year ago and 1.8 percent more than the figure for May 2013. Over 93 percent of outstanding RMLs are borne by residents. The outstanding value of CRELs also rose 2 percent from end-May 2013, or 23 percent from end-June 2012 to MOP 78.4 billion.
The delinquency ratio for RMLs has plateaued, with only a 0.06 percent increase month-to-month and a 0.01 decrease from a year ago.
Midland Macau Chief Executive Officer Ronald Cheung told Macau Daily Times that almost no property development project can currently reach the requirements set out by the new law. The residential market is also quiet due to the new regulations. He expects that the situation will remain like this until the end of the year. However, due to the decrease of supply and increases in demand, housing prices are set to go up despite the lack of transactions. He urged the government to look into the issue and consider an increase in housing supply.

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