By: Kelsey Wilhelm
Photos by: Cheong Kam Ka
We’ve seen double digit increases in price per square metre. What does that mean?
Nestor Ng – If you see the jump it’s mostly because of off-plan [sales] because usually future property would be [available] maybe only two years later. So, the price would be a little bit higher than the existing secondary market.
Do you think we’ll maintain the same type of activity that we’ve seen so far?
N.N. – I would say so. Usually, in the past, the end of the year is a slower season because of Christmas, the New Year, and also Chinese New Year is going to be in February [this year]. So we usually expect slower months, but at the same time for Macau recently we do not have many new developments.
And so the need for buyers is always present. Actually, people are interested in buying; they just want to make sure that it’s at the right price, in the right location. And then if it fits the buyer’s criteria, they will go ahead and buy it. But it’s not like before. [Now] we have more and more regulations, like the mortgage guidelines, the two-year special stamp duty, buyer’s stamp duty. These have actually put a lot of obstacles [in the way] of investors.
What’s the ratio in the market of investors versus primary home users?
N.N. – Let me put it this way: maybe in the past – such as the whole year [so far] of 2017 – I would say more than half of the people, or buyers, usually purchased the property for their own use, their children, who have been living with the family and just moved out to a smaller unit. Or maybe the parents are going to sell their large unit to buy two separate smaller units. So this is what we’ve seen in the past months, the trend.
Smaller apartments the trend
T1 or T2 type units are the trend?
N.N. – In the past months, T2 and smaller size units have been in high demand. They’re being sold more. There are a few T3, T4 that sell quite well, but of course buyers are looking at value. Anything above MOP15 million we consider ‘luxury’ condominium apartments. The T2, T1, or even studio [apartment] in past months have been in high demand and are the majority transaction: T0 to T2. These can be primary use and investment at the same time, so that’s why they’ve been more popular.
In the newer constructions the size of apartment is also weighted more towards T1, T2 rather than T3 or larger . . . ?
N.N. – I would say so. In a lot of new developments the majority of the units, it seems, would be T2 or T1. Even though developers are making the T3 smaller, not like five or six or even 10 years ago. T2 – we’re talking about sellable square feet – would be 1,200 or above.
But the trend is making it maybe less than 1,000 square feet. Macau might not be like Hong Kong at this moment. In the future . . . compared to Hong Kong I don’t see we will have, like, 700 or 600 square feet for two bedroom [units]. But I would see more developers going towards the direction of the smaller size compared to the ones they built before.
What about the new reclaimed land and the proposed public housing units; how will that affect the market?
N.N. – We do have the need for housing. In society [many] people are talking about [this need]. Since it’s already a decided plan, I’d say that that area needs more new developments, especially on the Macau Peninsula side where there are a lot of older neighbourhoods. And especially after the disaster [Typhoon Hato] you can see that we need some more new neighbourhoods or districts.
Once people move to a newer neighbourhood of smaller size maybe affordable housing will be put on the market. Because right now we don’t have too many mid-low priced units, or affordable housing units available to the public. So that’s why we have a lot of people saying “we can’t afford to buy”.
Do you think that could also lead to a type of gentrification effect in the older neighbourhoods?
N.N. – That’s what we’re hoping as well. Because we do see a lot of older buildings, and since we have different regulations, laws, there’s really nothing we can do at this moment. It really depends upon the government to expedite these [changes to legislation], make it like the older neighbourhoods [can be gentrified]. Maybe not even the whole neighbourhood; maybe just a single building with three or five units, so after they move out the developer or the landowner can upgrade or rebuild them.
The disaster you mentioned – Typhoon Hato – did expose some of the weaknesses in the buildings, either in building codes, inspection, maintenance, etc. Have you seen an increased awareness of these types of issues from clients?
N.N. – Yes, of course. Our clients now, also homeowners, have been [more] concerned. Good things happen from bad things. For example, the one near Hac Sa Wan, where all the windows were broken, also One Oasis, people have started looking into why – “Why did our windows get broken and that development’s did not get broken?”
But I think that the good thing is it increased the awareness level. Actually, it’s the property management, not only the developers, the quality of how they build the building. So people do ask, as well as developers.
What are the new casino openings going to do to the market, both regarding sales and rent?
N.N. – In the past two years Macau was in an adjustment period. After our prime, golden era of 2011 to 2014. After that, things such as new regulations hit our real estate market quite hard. And after that we’ve been at a steady pace.
So, [with] the new hotels, like MGM [Cotai] and also the Grand Lisboa Palace and all these new hotels, at least I would see that the demand for the housing market – for example the rental market, for sure – there will be increased demand. At the same time we’re looking at more full-time employees, also expats flying in from other countries.
And also in terms of the economy, not only the gaming, but [happening] at the same time [although] I don’t know about the timetable [for] the Hong Kong-Zhuhai-Macau bridge, as well as the Greater Bay Area, the nine cities all linked together. We’re looking at more and more positive news for our city.
We’ve seen people who have been ‘priced out’ of the Macau housing market moving to Zhuhai. Will that trend continue?
N.N. – Hengqin and Zhuhai, for me, are slightly different. For Zhuhai, they extended the [operations of the border] to 24 hours. And we didn’t see a lot of people because of that change move to Zhuhai. Macau is a very small place, and the people who like to live in Macau will always like to live here. We’re talking about an average rent for two bedrooms [in Macau] in a decent newer apartment of between MOP12,000 to MOP15,000.
But if we’re talking about Huafa in Zhuhai we’re talking about maybe MOP5,000, one-third of the price. People who have the time to travel and are on a flexible schedule would maybe consider moving to Huafa. But since Macau is very unique, and we have things like 24-hour food availability, etc. I wouldn’t see it as having a big impact or be strong competition for the housing market here.
Hengqin is still developing and things like the infrastructure – for example, medical, food and beverage, transportation – will still take time to develop. I don’t foresee that a lot of people will move to Hengqin within this one or two years. But I don’t know about after because there are a lot more, newer developments being completed.