Macau Business. Author: Therese Tu.
The Monetary Authority of Macau (AMCM) has no plans to ease policies on property taxes or loan-to-value (LTV) ratio – the percentage of the property’s value that’s mortgaged – for the time being, despite calls from some social groups echoed by legislator Zheng Anting in a written inquiry to AMCM.
The price and volume of private residential property transactions have continued to decline in recent years due to the sluggish economic environment, and the pressure on Macau and Hong Kong to raise interest rates has been intensified as the Fed has continued to raise interest rates, which will in turn increase the housing mortgage costs of local residents, legislator Zheng Anting pointed out.
Statistics from the Financial Services Bureau (DSF) show that only 1,632 property transactions were recorded in the first half of this year, a sharp drop of over 50 per cent year-on-year.
However, residents who need to purchase housing due to changes in family structure and the number of family members, are priced out of the market due to hefty down payments and property taxes, the legislator emphasized.
Therefore, Zheng questioned whether the authorities would consider relaxing the loan-to-value (LTV) ratio and gradually adjusting the property tax rate based on the price, area, and other factors of the residential unit, in order to help residents in purchasing housing units and stimulate the current sluggish property market.
In the reply to the legislator’s inquiry, AMCM indicated that it is not the appropriate timing to relax the LTV ratio now, as the total mortgage loan amount and monthly repayment amount for a resident to bear will increase if the authorities choose to relax the prudential measures now, which may lead to higher repayment pressure for the public and heighten bank credit risk.
Meanwhile, AMCM said that although real estate prices have decreased to some extent, they still maintained at a high level, which makes it “difficult for an ordinary family to afford”.
