After announcing relatively healthy 2009 profit results, the Shun Tak Group has welcomed moves for more regulation of the property market, but only if the rules are given time to bed down

More regulation will be good for Macau’s housing market says the Shun Tak Group.
Group sales director Warren Leung Cheuk Hang says the market is self-disciplined and consistently healthy and should be given more time to reach maturity.
Meanwhile, one of Hong Kong’s major real estate agencies says that constraints imposed on speculation in the mainland market may lead to an influx of capital to buy homes in Macau.

Nine rules
Last month, the Hong Kong government announced “nine rules” to encourage disclosures by property developers in their sales brochures, including the display of a non-furnished showflat, minimum thresholds for first-price lists and clear disclosure of a property’s location.
It even threatened a maximum stamp duty tax if speculation spread to the cheaper apartments.
Shun Tak Holdings sales director, Warren Leung Cheuk Hang, says the company will comply with the Hong Kong guidelines, but noted that buyers from Hong Kong have learned their lesson and are better informed.
The most successful real estate salesperson in Hong Kong, who once worked for the powerful developer Cheung Kong, notes that the local market is in good health, even with little regulation.
“There have been no major complaints of misleading information supplied by agencies or real estate promoters. Transparency is good and, even without the legal obligation, developers often disclose all areas clearly in their catalogues,” says Leung.
He does however defend more regulation by the government provided that sufficient time is provided for the rules to take shape.
“Within three to eight years, I believe that [the housing market] is going to be, I will not say more tightly regulated, but more mature in terms of its supporting infrastructure,” he predicts.

A great treasure
Comparing Macau in 2010 with Hong Kong in the 1980s, he says a sign of maturity is the familiarity with mortgages, which is a present reality in the Macau market.
“Macau is actually a great treasure. Of all the apartments’ proprietors, 77 percent are free of mortgage and the ‘cash flow’ is huge. This explains why even projects due for completion in three years can sell quickly,” says Leung.
He forecasts a minimum rise of 10 percent in prices and an increase of 30 percent in transactions this year, while underscoring the rise in property values is a long-term trend and that “there is no bubble in the market”.

Brakes on speculation
And at a time when the mainland is putting the brakes on market speculation, Stanley Poon, director of Centaline (Macau), believes that investors will bring money to Macau and Hong Kong, looking for opportunities, though the difference may not be obvious since  non-Macau buyers are responsible for only 10 to 12 percent of all transactions.
Poon disagrees with the idea that some local buyers are only “professionals” at the call of capital from the mainland, saying locals have strong purchasing power.
The Hong Kong-headquartered agency recently opened a branch in Macau–with another to follow soon– and hopes to raise MOP80 million in commissions during 2010.Shun Tak will be the sales representative for the Sociedade de Turismo e Diversões de Macau (STDM) apartment building in front of Wynn Macau and Hotel Lisboa.
Details will be unveiled within a week or two and prices will be slightly below those of the luxury apartments at One Central Residences.

Less revenue, more profit

Shun Tak Holdings’ full year profits for 2009 amounted to HK$1.19 billion (MOP1.2 billion), excluding the revaluation surplus on investment properties and net gains on the sale of its share in the Mandarin Oriental hotel.
However, the company’s revenue fell from HK$4.47 billion (MOP4.52 billion) in 2008 to HK$3.33 billion (MOP3.36 billion) in 2009.
The outlook for the Westin resort was “challenging” and the volume of TurboJet passengers suffered a slide of 17 percent due to a slump in the tourist market.
With the economy recovering and business to expand, Shun Tak also highlighted the “sumptuous and contemporary” columbarium project in Taipa.
With completion scheduled for the second quarter of 2011, the company expects it to attract significant interest.