Many readers will be excused for not being familiar with this French song “Non, je ne regrette rien”. “No, I regret nothing”, written in 1956 is best known through singer Edith Piaf’s 1960 recording. It’s a great song by the way, and is used to this day by the French Foreign Legion, so if you don’t know it, do check it out on YouTube.
I am reminded of it when it comes to property in Macau. For owners thinking of selling, is there ever a best time to do so without regretting it later? Ah that we had a crystal ball to be able to gaze into the future!
I have countless examples of clients and friends who bought back in the mid- 2000s and sold on several years later having done extremely well. A few of them: a 4 bedroom and a 3 bedroom apartment in Hellene Garden, Coloane could be bought in 2004 for HKD1.9M and HKD650K respectively. The same homes have just been sold for HKD12.5M and HKD9M. A 3 bedroom in Sai Van lake, Macau sold for HKD930K in 2004 and is under offer at HKD14.5M today. A standard 3 bedroom in the Manhattan, central Taipa cost around HKD6.5M in 2006 and today there are several listed for sale at between HKD13.5M and HKD15M.
There are few places in this World that you can see such gains. Everyone I think would agree that the owners who have held their nerve and ridden the market for the past ten or so years have been fortunate in the capital gains they’ve made. Have there been any regrets? Yes, numerous. Stories abound of those jumping out of the market too early and then having to rent and be at the mercy of a landlord. One client bought his 4 bedroom unit in Kingsville, Taipa for HKD3.8M and sold delightedly 3 years later for HKD7.8M; today I see a similar unit listed for sale at HKD25M. One couple bought on Nam Van lake for just over HKD1M in 2002 and sold for HKD3M 4 years later, happy then but regretting now as the unit is valued at around HKD8M today and they too are having to hop from one rental to the next.
I’ve bought and sold a few properties myself. Looking back, my only regret is having let go two small, 2-bedroom apartments in old Macau. 3 and 4 storey walk ups with lovely open views of a church and its gardens, but in hideous disrepair when bought. Originally purchased in 2007 for HKD400K, given a face lift with modern design and quality finishes, and sold 6 years later for HKD3M. 7.5 times the investment – what are you grumbling about I hear you ask. Well, today, a mere 18 months on, they would easily sell for at least HKD4.5M!
So where is the message in all of this? It’s my belief that the days of such huge capital gains that we’ve seen since over the past decade are behind us. Demand will remain strong, but new blocks of ‘luxury’ high rises, and the opening up of Heng Qin for further middle income high rises will provide supply. For owners looking to cash in on their gains, prices are softening and I wouldn’t hesitate putting your properties on the market, especially in the case of the bigger units.
And for those still hunting out investments for a good return within a 2-3 year turn around? The small, ugly ‘no hoper’ apartments in central Macau are to my mind a safe bet. The young, low income newlyweds and 20-somethings that have been priced out of the market today desperately need small affordable entry-point homes that are centrally located near family and friends (and not stuck out at the end of the CoTai strip where swathes of public housing has and continues to be erected ….). With a bit of leg work exploring the older neighbourhoods and help from your friendly real estate agent, units in low rise walk up buildings can still be picked up relatively cheaply and transformed into bright, cozy, modern homes. Easy to rent whilst you wait the 2 years for the sales tax imposed on capital gains to expire, they will be quickly snapped up at a good return for the investor by eager local buyers.
