Quiet after the storm

Damage caused by Typhoon Hato and the recent Legislative Assembly elections have caused a lull in the real estate market, with total transactions falling 22 pct m-o-m and 20 pct y-o-y. Sales of on-plan and off-plan units fell, with the market for off-plan to remain slow until November, says expert. Meanwhile, average prices rose y-o-y.

After the damage caused by Typhoon Hato and the recent Legislative Election, the real estate market has been quiet since the end of August, points out Jane Liu, managing director of Ricacorp (Macau) Properties Limited.
Ms. Liu noted that the passage of Typhoon Hato increased owners’ expenses for repairing damage to stores, despite the Macao Economic Services providing support by offering interest-free loans to store owners.
“It is a loan, borrowers still need to repay,” said the real estate representative. “As such, people at the moment have no desire to buy or rent properties,” she opines.
With the campaigning period for the Legislative Assembly elections taking place over the past two weeks, Ms. Liu also pointed out that residents had their attention on the election rather than the property market.

Plummeting August transactions
Official data released by the Financial Services Bureau (DSF) shows that the total number of transactions dropped from 764 in July to 594 in August, down 22.3 per cent month-on-month.
The number of transactions in August also experienced a drop of 20.3 per cent when compared to the same month a year ago.
Furthermore, the significant drop was also influenced by the changes made to the mortgage ratio, introduced in May.
DSF data shows that 531 completed properties were transacted in August, a decline of 23.8 per cent month-on-month, while off-plan properties only dropped by four transactions, to 63 units.
Ms Liu told Business Daily that no notable new projects had been rolled out in the past two months, resulting in the small amount of transactions in off-plan units when compared to previous months, such as the 535 off-plan transactions recorded in May.
When asked about whether the new property located next to the public housing of Mong Ha at Edificio Mong Sin - Trust Legend - would cause an uptick in the number of transactions in the coming months, Ms. Liu said changes would only be seen “perhaps in November”.

Prices dropping
The average prices of flats in August stood at MOP94,822 per square metre, a slight drop of 2.7 per cent month-on-month, DSF data indicated.
However, the average price increased by 14.5 per cent when compared to the figure of MOP82,800 in August of 2016.
Looking at specific areas, Coloane was the zone that experienced particular growth in the price of residential units when compared to the previous month, up 5.7 per cent, from MOP131,808 in July, to MOP139,300 in August.

Safety comes first
Given the significant flooding and the many broken windows caused by the impact of Typhoon Hato, Ms. Liu said clients nowadays are more concerned about safety rather than convenience when looking for flats.
“Many of the buyers cancelled buying flats in the Inner Harbour Area after the typhoon,” disclosed the real estate agent. “They [the buyers] are more concerned with practical matters and ask questions like ‘how thick is the glass’ when seeing flats.”
As such, clients are looking in particular at which district the flat is in and are trying to avoid low-lying areas, said Ms. Liu.