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Mortgage loans drop 28pct in Q4

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New approval of residential mortgage loans approved by local banks dropped almost 28 percent to MOP 4.6 billion in the last quarter of 2011, due to stricter economic conditions and borrowing terms.
According to data from Macau’s Monetary Authority released yesterday, new residential mortgage loans approved by Macau banks fell 27.7 percent quarter-to-quarter to MOP 4.6 billion, of which 91 percent was extended to residents.
When compared with the same period of 2010, new approvals also dropped by 55.6 percent.
At the end of December, the outstanding value of residential mortgage loans reached MOP 76.2 billion, an increase of 2.6 percent from three months earlier or an increase of 24.5 percent from a year ago. The resident component made up 91.8 percent of the total.
After registering an increase in the previous quarter, newly approved commercial real estate loans declined by 24.9 percent quarter-to-quarter to MOP 10.5 billion, of which 93.5 percent was granted to residents.
As at the end of December last year, the outstanding value of mortgage loans reached MOP 76.2 billion, and delinquency ration stood at 0.09 percent, up 0.03 percentage points from the previous quarter of 0.01 percent a year ago.
Ronald Cheung, Midland Macau’s sales director attributed the latest drop to the negative atmosphere in the market during that period, including measures taken by the government to cool the real estate market, the launch of economic houses, falling stock markets, rising interest rates and banks tightening lending in order to off-set the over-lending in the first half of the year.
Cheung, however, expected mortgage loans to rise at the end of the first quarter this year. “Because traditionally, there will be a collective release of the purchasing power accumulated in the Lunar New Year that is usually celebrated in January or February.”
“First quarter, as well as April, is traditionally a small peak of buying season,” he told Macau Daily Times yesterday, “but it is difficult to say if the momentum of the quarter can keep in the second quarter. May, June and July is the real challenge.”
He adopted a wait-and-see attitude due to the uncertain atmosphere in the market.
Macau General Association of Real Estate expected that local property prices would rise for about 5 percent this year in a gradual manner, while rents would see a 5-10 percent growth.   
The association was quoted by local media as saying that more potential buyers are coming out and visiting properties after the Lunar New Year holiday and transactions were expected to climb steadily. But due to the economic uncertainties in neighboring regions, it was difficult for the local property to jump by large scale even though the local economy remained robust.
The association expected property prices to remain comparatively stable in the first half of this year and to start climbing in the latter half. And the expected sales of two major residential projects in the coming months would also boost the second-hand market.
As for the leasing market, the association forecasted a more handsome rise because new resorts and casinos meant more imported workers who mostly rent their accommodations here. Coupled with continuous inflow of visitors from mainland China and Hong Kong, the result will be a 5-10 percent increase in residential and shop rents.

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