Macau moves to cool property market

The Macau government has again tightened mortgage lending and has proposed several measures to cool its property market, most of which are directed at non-Macanese buyers and the luxury segment.

From today, for properties valued at 6 million patacas or less, non-resident buyers can only borrow between 60 and 70 per cent of the value of the properties, down from 70 to 90 per cent previously, the special administration region's Information Bureau said in a statement on its website.

Macanese residents will not be affected by the changes.

For properties worth more than 6 million patacas, the mortgage ceiling for non-resident buyers will drop to between 40 and 50 per cent of the value, from 70 per cent, while that for Macanese residents will drop to between 50 and 60 per cent from 70 per cent.

For properties under construction, non-residents will see the ceiling drop from 50 to 40 per cent if they buy properties valued at 8 million patacas and above, while Macau residents will have their ceiling lowered from 70 per cent to between 50 and 60 per cent for properties worth 6 million patacas and above.

In addition, the Macau government proposes to extend the application of a special stamp duty - which was implemented on June 14 last year on residential transactions - to commercial properties, offices and car parks.

The duty amounts to 20 per cent of the transaction price for properties sold within a year of their purchase. For those sold within two years, the levy will be reduced to 10 per cent.

On top of this duty, the government yesterday suggested an extra 10 per cent stamp duty on residential properties bought by companies and non-Macanese, in a bid to clamp down on speculative activities.

These two proposals will have to be approved by legislators before they can be implemented.

Ronald Cheung, the chief executive of the Macau unit of Midland Realty, said the lowering of mortgage ceilings was particularly effective in dampening large transactions.

Cheung also said the imposition of an additional stamp duty on non-residents was the toughest of this round of measures that would directly reduce investment interest from outside Macau.

According to Midland data, the average per-square-metre transaction price of Macau residential properties surged 21.9 per cent in the second quarter from the first quarter to 55,427 patacas.