Mortgage loans for residential property

Residents wishing to acquire a second house in Macau will see mortgages covering less ratio of the property starting today, the government announced during a press conference held at its headquarters yesterday.
The ratio of mortgage loans for real estate acquisition has been readjusted in four housing price categories, with the biggest cut applying to the purchase of residential units costing up to MOP3.3 million, down to 70 per cent from 90 per cent (see box 1).
Potential buyers seeking to acquire a second residential property valued over MOP8 million will have access to a 40 per cent credit line instead of 50 per cent.
The credit line for residents planning to acquire their first residential property will remain unchanged. Again, the higher the price of the property, the lower the mortgage ratio that can be procured by the potential buyer (see box 1).
Lau Hang Kun, Assistant-director of the Department of Bank Supervision of the Macao Monetary Authority (MMA), said the measures are being enacted to control real estate speculation, given that “the development pace continues to accelerate,” and to assist banks to improve risk management.
Questioned by Business Daily about the timing of these measures, economist José Isaac Duart says it “suggests the government fears that real estate prices may be on the rise again.”
He added that the current policy seems to be very much in line with previous measures adopted by the government.
“In sum, these are measures to limit demand pressure for real estate. But it does not seem that they will have much of an impact over external demand, say, from Mainland China, while it will continue to be particularly difficult for young people to acquire a home.”

The loan cap applying to the acquisition of a first residential unit by non-residents has also been adjusted to lower ratios.
Acquisition of housing worth more than MOP8 million entitles buyers to up to 30 per cent in bank credit. Property worth no more than MOP3.3 million will enable buyers to borrow up to 60 per cent, with the loan cap established at MOP1.65 million, equivalent to 50 per cent of MOP 3.3 million.

Projects under construction
Regarding real estate under construction, similar readjustments will follow for the acquisition of a second housing unit by Macau residents as well as the acquisition of a first property by non-residents (see box 2).
Loans for the acquisition of property worth more than MOP8 million by residents will be capped at 40 per cent, while credit for the purchase of property worth the same amount by non-residents will be limited to 30 per cent.
The current mortgage scheme for the acquisition of a first housing unit by Macau residents will not be affected by the new readjustments.

Mortgage loans for acquisition of residential property under construction