The number of unsold, completed flats in Macau has ballooned to nearly 60,000 units, prompting calls for urgent government measures to help soak up the unprecedented supply. One Macau banker estimates that it would take a 25 per cent increase in the enclave's population of 410,000 to fill the existing stock of vacant residential units. Even at prices significantly below the Hong Kong market, many in Macau cannot afford to buy their own flats, estate agents said. Banks, hungry for more business, have begun gradually cutting mortgage rates since the start of this year. There is also talk of the government instituting a subsidy or discount for Macau home buyers. While these measures could help, neither are expected to be sufficient to soak up the huge number of empty flats, bankers and real estate agents said. 'These units cannot be digested in the market,' said Mason Sang Lam, director of the Royal Real Estate Co. Agents described last year's housing market as 'very tough', with some branches not seeing any sales for many weeks. Real estate agents said locals could get a mortgage at 3 per cent less than foreigners, and banks were now asking for only a 10 per cent down payment, instead of the 20 per cent to 30 per cent they required last year. Because of strong competition, Hongkong Bank in Macau said there was as much as a 1 per cent difference between the mortgage rates offered to similar customers by different banks. Estate agents like Mr Lam said business has picked up a bit since the beginning of the year thanks to these measures. 'Flats in Macau are now priced at almost cost,' he said. As for the government offering locals a subsidy or discount, this is nothing new for Macau. A similar scheme provides business investors who buy equipment made locally with a 4 per cent discount. Such an incentive programme for the Macau housing market is feasible, according to bank and real estate officials. While business might be picking up, buyers would be careful about where they decided to invest, Anthony Frazer, chief executive of Hongkong Bank in Macau, said. Mr Frazer said he did not expect an overall improvement in the Macau property market for some time, but good quality projects would continue to sell well. In the event of a government subsidy, estate agents say buyers would concentrate on quality developments and shun those with poor location or facilities. As a result, some developments would remain virtually vacant, no matter what incentives were offered, they said.