Macao News, by Staff Reporter. 8 February 2024.

JLL Macau wants the government to drop all property market cooling measures, a move he says was key to realising buyers and sellers’ expectations.

Macao’s property woes are worsening, according to real estate company Jones Lang LaSalle (JLL). The company predicts that rents will rise by up to 5 percent this year (on top of 2023’s surge), while sales continue to totter, multiple media outlets have reported.

Speaking at a press conference yesterday, JLL Macau’s general manager Oliver Tong urged the government to lift its remaining cooling measures “to salvage the fragile housing market.” These regulations were introduced in 2010 to curb property speculation.

“The overall problem in Macao is not price, not transactions, but confidence,” said Tong. “If Macao can be a 100 percent free market, the confidence will be regained, which will be beneficial for the market.”

The government has already eased some cooling measures. Second home purchases are no longer subject to a five percent stamp duty, for example.

Tong said he also wanted to see investment thresholds relaxed for property buyers from “surrounding areas”, and a review of Macao’s land premium.

He criticised the new 70 percent loan-to-value ratio cap for residential properties, saying it had accelerated small and medium-sized flats’ falling prices and left residents aiming to buy bigger properties with less means to do so.

Tong noted that removing all cooling measures would likely cause Macao’s housing prices to drop further, for a period. This would result in a necessary realignment of buyers and sellers’ expectations, he said.

Macao’s property market recorded fewer than 250 transactions in the first 11 months of last year, according to Tong – a year-on-year drop of 27 percent. The city’s overall property price index for the September to November period fell by 5.7 percent, year-on-year. Prices for the Macao peninsula were down 6.7 percent. 

The latest available data from the Monetary Authority of Macao showed new approvals of residential mortgage loans were down more than eight percent for the October to December period, when compared with the previous period.

Rents, meanwhile, look set to keep climbing. JLL Macau noted that high-end and mass-to-medium residential property rents increased by 16.3 percent and 19.4 percent respectively last year, due to a post-pandemic influx of non-resident workers.

A more moderate increase of up to five percent was expected this year, said Tong.

JLL has said that interest rate hikes, the global economic slowdown and slowing economic recovery in mainland China were contributing to Macao’s sluggish property market – as well as that of the broader Greater Bay Area.