New Macau law to affect pre-sale supply

A new pre-sale law is expected to hit Macau's home supply when it becomes effective next month, with developers needing to meet a range of new requirements before they launch a project.

The law, which was approved by the Macau Legislative Assembly on May 21, aims to protect buyers by imposing conditions on the sale of unfinished flats and regulating sales procedures.

Among the changes is a requirement that developers complete the foundation of a building and obtain pre-sale approval before they can sell the units.

Until now it was common for developers to sell their projects even when a site was empty. The need to conform with the new law would result in a drop in the supply of flats for pre-sale because developers would need more time to prepare projects for sale, said Stanley Poon Chi-ming, managing director of property agency Centaline Macau.

"Many developers rushed to sell their pre-sale projects in the last few months before the new law was due to become effective," Poon said. Sales of unfinished flats doubled in the last few months.

A total of 3,585 homes were sold in the first quarter of this year, of which 42 per cent were unfinished flats, a local newspaper cited Statistics and Census Service data as showing.

Poon expects sales by his agency to drop by 40 to 50 per cent in value and by up to 60 per cent by volume in the near future owing to the decline in supply of pre-sale projects. "It's not clear when supply will get back to normal, as it will depend on how long it takes for the government to approve the projects," he said.