MACAU GOVERNMENT ABROGATING ALL PROPERTY MARKET COOLING MEASUREMENTS

As of April 2024, the Macau government announced the abrogation of all remaining restrictive measures imposed on the real estate market, with the new policies taking effect on April 20th. In the previous policy address in 2023, the administration announced the abolition of the 5% supplementary stamp duty levied on secondtime residential property purchasers, and the unification of all residential mortgage ratios to a maximum threshold of 70%. The current year’s new measures engender four substantive modifications.

Primarily, the 10% supplemental stamp duty previously imposed on all non-local residential purchasers has been abrogated. This tax instituted in 2012, had led to a plummet in the proportion of foreign purchasers from approximately 10% per annum prior to its implementation to a mere 2% to 3% thereafter. Complementing the revocation of this supplementary levy, the new measures now permit all non-local purchasers to access a maximum mortgage ratio of 70% when purchasing residential properties, so to parity with local residents. This new measure is anticipated to attract an influx of foreign capital into Macau’s real estate market.

RESIDENTIAL MARKET PERFORMANCE REVIEW

The comprehensive abrogation of restrictive measures is regarded as a further response to industry and societal concerns amid the pressurized market environment. As of  the first quarter of 2024, there were 538 residential transactions, reflecting a 45% YoY decline. The average unit price in salable area was reported as MOP7,957 per sq ft, indicating an 8% YoY decrease. The referential indicator prime rate in Macau remains at its peak of 6.125% since the previous interest rate escalation in July 2023. It is anticipated that the United States may consider cutting interest rates in the final quarter of 2024, albeit uncertainties persist.