Ambiente is often asked, “When is the best time to buy property here in Macau?”
And our reply: “When everyone is selling!”
This is a flippant reply of course as there are numerous factors, primarily personal to the buyer, that need to be considered ….– their buying power, mortgage rates, their intention for the property (a capital gains play or for rental income stream) and their overall financial status. But with a considerable softening of prices lately, we are advising that today would seem to be a good time to buy as there are bargain priced investments to be had for sure. Especially the smaller properties in the lower budget areas, older buildings, walk ups. And especially for Macau ID holders who enjoy a 3% stamp duty, rather than the 13% charged non Macau ID holders.
We have a one bedroom apartment in Barra for example, that is selling for HKD1.9M – less than most car parks I hear you say! – a perfect little ‘starter home’ for a young newlywed local couple who will want to be within the buzz of the Barra market area, close to public transport and the convenience of shops and restaurants. All it needs is a quick and simple renovation and some cute, inexpensive IKEA furnishings and this property will achieve a rental return of 5%. Plus, because of its location and price bracket, it will give a healthy capital gain when time to sell.
It does take nerves of steel to buy when negative sentiment abounds and many owners are trying to sell. During the global financial crisis of 2007-08 when banks, stock markets and many businesses were collapsing around us, smart, and yes, brave, buyers were picking up units for a relative song – one plucky friend bought hers in luxury development One Central at HKD3,800 a square foot and then sold in late 2014 when prices were at their peak of around HKD14,000 a square foot. Now that’s what I call a good investment!
Looking ahead to 2016, we feel that with prices will continue to soften during the lead up to Chinese New Year and that from Q2 we’ll start to see some uplift. The key is to always have an eye on location, location, location and in the case of the majority of local buyers, convenience, convenience, convenience. Choose locations where there will always be high demand and yet relatively low supply or low turnover of the more ‘unique’ properties – Old Taipa Village and within World Heritage areas in central Macau being cases in point. Take a long term view – 3-5 years. Look for the smaller, older, more affordable units – less risk and financial outlay to you as a buyer. For now, avoid the glitzier new developments where prices are over inflated and there tends to be oversupply and rental return is extremely low. Focus on properties that the locals will be looking for or indeed the folks from Hong Kong wanting a small holiday-weekend pad, as these are your sure-fire purchasing market.
As the saying goes, ‘Snooze, you lose’. Macau has seen this be true only too well in the property market. Back in the early 2000s, many locals and expats alike were caught napping. They missed all sorts of chances to buy underpriced homes. And shops, offices and car parks for that matter too.
Don’t miss another golden opportunity if it presents itself; jump on the band wagon and hold on tight!
