Rents up, sales down in 2012: property agencies

Home rental prices are expected to rise this year by 10 to 15 percent while sales are likely to plunge also 10 to 15 percent, according to forecasts from local real estate agencies.
According to Centaline Macau and Midland Realty, commercial and residential rental prices will increase, triggered by the opening of new resort Sands Cotai Central – slated for spring – the development of Hengqin Island and the construction of the Light Rapid Transit system.
These projects will attract new foreign labour, the companies say.
Midland Realty’s chief executive officer Ronald Cheung told reporters at a press conference last week that the supply of apartments is low, which may create a ‘tension’ that will keep prices up.
He added that after the mega corruption case that involved former secretary for Transport and Public Works, Ao Man Long, the government has curbed the approval of new private projects and that will reflect in the supply of residential units.
As for commercial rentals, real estate companies say the 39 percent boom registered in retail sales last year may cause new increases this year. They are expecting prices to increase between 10 to 25 percent.
As for apartments for sale, Centaline’s regional sales manager Jacky Sek foresees a decrease that will start right at the beginning of this year. However, Sek said that by the end of 2012 the market may start picking up and the decrease would slow down to five percent.

Uncertain ground

Sek said that the cooling down of residential sales might be due to the uncertain international economy and to the new special stamp duty introduced by the Macau Government last year.
According to the new tax, owners who want to sell a residential unit or property under construction within the first year of buying will be required to pay an extra tax worth 20 percent of the transaction price. The levy will be reduced to 10 percent if the property is sold in the second year after it was acquired.
The expected construction of 19,000 public housing units by the end of this year may also have an impact on business, he said. Although the private and public housing markets are independent, Sek said, the external economy might worry potential buyers, thus bringing down transactions.
Meanwhile the number of residential transactions soared 12 percent in November to a total of 681, according to the latest data released by the Statistics and Census Service.
Home sales were down by close to two thirds year-on-year, despite November records showing the highest monthly transaction volume in four months.
The increase was less significant when it comes to investment. Housing transactions in Macau were worth MOP 1.7 billion in November, a three percent increase from October.