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Fifth of property agencies shut down in 2014 02/27/15

Macao Daily says that the relatively few transactions in the real estate market last year pressured the operations of small and medium sized agencies, and claims that nearly 20 per cent of these smaller agencies have closed.

Nearly 20 per cent of the city’s small and medium-sized property agencies shut down last year, Chinese-language newspaper Macao Daily reported yesterday, quoting President of Macau Real Estate Development Chamber of Commerce Lok Wai Tak.

Mr. Lok told the newspaper that many local residents bought residential flats in Hengqin last year, directly affecting the operations of local SME property agencies. Moreover, he claimed that the income of real estate agents had also decreased some 30 per cent, in addition to the 20 per cent closures that the city saw last year.

The president also said that although some of the smaller agencies did not close, they have started letting staff go. The operations of these smaller agencies are currently run by the bosses themselves. Meanwhile, many agents have already turned to the gaming industry, which can offer higher salaries.

The director of the Macau General Association of Real Estate, Ip Kin Wa, also told the newspaper that it is true that operations for smaller property agencies are getting harder when bigger companies are able to sustain their businesses by selling flats in Hengqin.

The operations of many smaller agencies, according to Mr. Ip, are ‘sinking into unconsciousness’ or depending upon renting out shops.

According to the official data of the Financial Services Bureau (DSF), the total transactions of residential flats reached 7,625 in 2014, representing a year-on-year drop of 36.7 per cent. Some 6,343 of total transactions were made on completed flats while the other 1,282 were made on flats still under construction.

Indicating that the city has some 8,000 property agents, Mr. Ip said that some 7,000 transactions that Macau registered last year means each agent sealed only one deal on average last year.

In addition to transactions, the rental market is under pressure. Affected by the slowdown of the gaming industry and the anti-graft policy of the central government, Mr. Ip said many junket promoters had terminated their rental contracts. Moreover, the 24-hour border crossing policy and the extension of operating hours of the Zhuhai border are also directly influencing the local market, he says, claiming that the operations of property agencies will be even more difficult this year.

Mr. Ip foresees that the market will continue to be silent this year, anticipating that there will only be some 6,000 transactions involving residential flats this year.

Mr. Lok, on the other hand, predicts that the market will stablise during the second half of the year, with transactions remaining at 2014 level, while housing prices may increase by 5 to 8 per cent.

Nevertheless, he noted that if the number of transactions continues to decrease, it is possible that even big property agencies will reduce their scale of operations.

Source http://macaubusinessdaily.com/Property/Fifth-property-agencies-shut-down-2014

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