The market is cooling, in terms of prices and transactions. Official data reveals that the average housing price had dropped by 11 pct in January. Former legislator Ung Choi Kun predicts that prices may continue to drop, but only for big flats
The property market started cooling in January, official data released by the Financial Services Bureau (DSF) shows, indicating that the average price of a residence was MOP85,717 per square metre – down 11.1 per cent compared to December 2014.
Compared to January 2014, however, residential prices in the first month of the year still posted a slight increase of 1.3 per cent.
According to DSF, homes that are still under construction continued to be substantially more expensive than completed flats.
In January, homes under construction were priced at MOP123,949 per square metre. Despite this representing a drop of 14.8 per cent compared to the MOP145,555 of December 2014, it also indicates an increase of 18.3 per cent year-on-year.
Meanwhile, prices for completed flats were rather more stable, amounting to MOP77,927 per square metre in the first month of this year, representing a month-on-month decrease of 6.2 per cent, or a year-on-year drop of 1.3 per cent.
In terms of district, homes in Macau are still the cheapest albeit the smallest on average. In January, residential flats on the Peninsula occupied an average gross floor area of 57 square metres, costing MOP80,415 per square metre.
Flats in Taipa offered the biggest space, occupying 95 square metres on average and costing MOP94,325 per square metre. Meanwhile, real estate in Coloane is the most expensive, where homes of an average 88 suqare metres fetch MOP121,746 per square metre.
Official data also showed that the property market had been even more silent in January. The total number of transactions dropped 19.6 per cent, amounting to only 336 deals, compared to the 418 transactions of December 2014.
On a year-on-year comparison, the number of transactions in the first month of the year plunged by more than double, down 55.7 per cent.
According to DSF, most of the transactions were made on homes on the Peninsula, which accounted for 277 of the total. Deals made on residential flats in Taipa and Coloane accounted for 44 and 15 of the total, respectively.
Ung Choi Kun: Prices for big flats to fall this year
Meanwhile, former legislator Ung Choi Kun, President of the Association of Property Agents and Realty Developers of Macau predicts that housing prices may only cool off for bigger residential flats, which he referred to those occupying at least 1,500 square feet (139.92 square metres).
According to Chinese-language newspaper Macao Daily, the Association head anticipated on Monday that the transactions of homes measuring a minimal 1,500 square feet will increase this year, anticipating prices will thus decrease.
However, prices for smaller flats will remain at the current level, he said, claiming the average prices will stay between some MOP7,000 per square foot (MOP75,040/square metres) in 2015.
Refuting concern that panic selling may appear in the property market due to the slowing economy, Mr. Ung did indicate that the market will be healthier if the government cancels the special stamp duty, which it introduced in 2011 to combat skyrocketing housing prices.
The duty comprises a levy of 20 per cent of the selling price if the owner of a property sells it within one year of purchase, or 10 per cent if the owner sells the property between one and two years of buying it.
Nevertheless, Mr. Ung claimed that the real estate market will not be affected even if the government does not cancel the special tax.
In addition, he reckons that the government should loosen the regulations on home mortgages, indicating that the industry is professional enough to analyse the financial status of mortgage applicants objectively.