Even before the apartments Macau is building in Hengqin have hit the market, reports of attempted fraud are emerging
Macau Business | September 2022 | Special Report | Housing: A place to call home
About two years ago, Facebook and WeChat groups using the name Macau Urban Renewal Limited were found to be advertising apartments for sale in the Macao New Neighborhood project being built in Hengqin.
This was the first time fraudulent schemes related to this project were identified, but certainly not the last.
Earlier this year, lawmaker Ella Lei called on the government to help residents who purchase property in mainland China, including those whom she says “are easily misled by certain false sales practices.”
The legislator raised the point that, with construction of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, many residents have chosen to buy properties over the river.
However, when faced with the different laws, regulations and consumer rights in force there, “it is often difficult for residents to obtain complete information before purchasing properties.” Ms Lei informed the Government she had received complaints from Macau residents over contracts suspected to be fraudulent, delays in the surrender of property to the purchaser, unscrupulous sales practices and the wrongful sale of office buildings.
Nothing in that comes as a surprise to Tirso Olazábal, Partner, MdME Lawyers.
“The main issue with Macau residents investing in Hengqin is their lack of familiarity with the policies and environment. In fact, in recent years we have seen people complaining about misleading transactions because they did not seek proper legal support before completing and merely relied on their own knowledge of buying property in Macau. Other factors such as false advertisement and construction delays have contributed to undesirable situations,” Mr Olazábal tells Macau Business.
He highlights the crucial fact that, under the general principle of One country, two systems, the legal regime for acquisition of housing units differs between China and Macau. “Therefore,” he stresses, “it is very important to take precautions before investing in real estate in China, including in Hengqin. For instance, potential buyers must be aware of the existence of purchase restriction policies, property title, the nature of the land on which the property is located, as well as the allowed purpose for such property. Moreover, potential buyers must also be familiar with the terminologies and wordings used in the conveyancing contracts, as the same terminology may be attributed different meanings and legal effects in China and in Macau.”
Though, even if the situations explained above “have contributed to a lack of confidence on the part of certain Macau residents with respect to investing in Hengqin,” they should not “in any way taint the great potential the Hengqin property market has to offer,” the MdME Partner insists.
“As such, we are of the opinion that Hengqin will be a place where Macau investors – duly informed and assisted by lawyers and banks (several banks in Macau offer mortgages for property acquisition in Hengqin) – will invest,” Tirso Olazábal explains. “Hengqin is a long-term investment that may offer an alternative place for Macau residents to live or retire” and “a valid destination for real estate investment in the next few years,” as the present Hengqin landscape already shows.
Olazábal’s view on Hengqin’s potential is one shared by all the experts Macau Business spoke with.
Professor Kin Sun Chan of the University of Macau’s Faculty of Social Sciences has no doubts: “The Hengqin Cooperation Zone can provide Macau residents with a wider choice of places to live, with more diversified career development. According to the Macao SAR Government, there is enough space there for the future public housing supply to meet diverse housing needs.”
His colleague at UM, Edmund Li Sheng, adds that “regional collaboration has become a decisive move for Macau in saving itself from the land and housing supply crisis” and “unlike in other places, Macau can jointly govern the 106 square kilometres of housing on Hengqin island with the Guangdong Provincial government under the arrangements of the shared administration system.”
Sheng, a Professor of Political Economy and Public Policy in the Department of Government and Public Administration believes that “Hengqin, with its vast land area and proximity, is a godsend for Macau, because further integration between the two regions would help Macau overcome its own limitations” and that “establishing the Cooperation Zone will also create new development opportunities for Macau residents and provide new employment and business opportunities, thus making it a new home for Macau residents.”
Summer of ’23
The government expects the construction of residential buildings and the associated community facilities in the Macao New Neighborhood project located in Hengqin’s Guangdong-Macao In-Depth Cooperation Zone to “be completed by mid-2023”.
This according to responses from an Executive spokesperson given last June at an interpellation by deputy Leong Sun Iok.
In addition, “construction work is in full swing on the project’s associated community facilities, including namely schools, health posts, daytime support service centres for the elderly and family support services complexes; these are intended mainly for Macao residents and will operate in accordance with the rules laid down in mainland China combined with the corresponding management models of existing services in Macau”, the same official source revealed.
The project, which includes 4,000 flats for Macau residents and 205 for qualified professionals, is being developed by a subsidiary of Macau Urban Renewal Limited.