The Government is to tighten mortgage-lending conditions for both non- first-time resident buyers and non-resident buyers who purchase a residential property or enter into a pre-purchase of an unfinished flat.
First-time resident homebuyers will not be affected by the measure, which comes into effect from 5 May. Mortgage lending applications (including pre-sale mortgage) submitted to banks on or before 4 May will not be affected.
The Office of the Government Spokesperson announced the news today during a press conference at the Government Headquarters.
The Government is closely monitoring the local housing market and does not rule out the possibility of launching further measures if they are needed.
The new Government measure is to curb overheating in the local housing market; to facilitate stable development of the residential property market; and to assist local banks in risk management. The Government made its decision after collecting opinion from the community and undertaking a comprehensive analysis.
Under the new measure, for those Macao residents who are non- first-time buyers purchasing a residential property valued at or below 3.3 million patacas, the maximum available mortgage is adjusted to 70 percent of the property’s purchase price, from the 90 percent available previously. For a housing unit with a valuation in the range of 3.3 million patacas to 6 million patacas, the maximum available mortgage will be 60 percent of the purchase price (compared to 70 percent previously). Property in the valuation range of 6 million patacas to 8 million patacas will now have a maximum available mortgage of 50 percent (compared to 60 percent previously). Property valued at more than 8 million patacas, will have a maximum available mortgage of 40 percent (compared to 50 percent previously).
For non- first-time resident buyers pre-purchasing an unfinished housing unit, the maximum available mortgage will be as follows: for valuations at or below 6 million patacas, 60 percent, from 70 percent previously; for units valued in the range of 6 million patacas to 8 million patacas, 50 percent from 60 percent previously; for property valued at more than 8 million patacas, a maximum mortgage of 40 percent, compared to 50 percent previously.
For non-resident homebuyers purchasing a property valued at or below 3.3 million patacas, the maximum available mortgage will be 60 percent, from the 70 percent allowed previously. For a housing unit valued in the range of 3.3 million patacas to 6 million patacas, the mortgage lending cap for non-residents will be 50 percent (as compared previously 60 percent). For property valued in the range of 6 million patacas to 8 million patacas, non-residents will now have available a maximum 40 percent mortgage (versus 50 percent previously). For property valued at more than 8 million patacas, the maximum mortgage available to non-residents will be 30 percent of the purchase price (versus 40 percent previously).
Non-resident buyers pre-purchasing an unfinished housing unit valued at or below 8 million patacas, will have a maximum available mortgage of 40 percent from 50 percent previously. For such a property valued at more than 8 million patacas, the maximum mortgage for non-residents will be 30 percent, compared to 40 percent previously.
Maximum available mortgages for Macao residents seeking a first-time purchase in the residential property market remain unchanged. The term ‘first-time buyer’ refers to mortgage applicants who do not own 50 percent or more of rights of any residential property in Macao. Those Macao residents who have acquired a residential property or its rights by inheritance or as a gift are still eligible to be classified as first-time buyers. Such mortgage applicants are required to submit to banks the following: a certificate – issued by the Financial Services Bureau – confirming exemption from Stamp Duty; and other necessary documents to prove applicants’ eligibility.
Between the fourth quarter of 2014 and the end of the first quarter of 2016, Macao’s property market experienced an adjustment period. From the second quarter of 2016, the increase in the number of transactions began to accelerate. Property prices recorded in the first quarter of 2017 saw a 20 percent year-on-year increase, and a 4.7 percent sequential increase from the fourth quarter last year. The number of transactions in the first quarter of 2017 also grew significantly judged year-on-year.
According to the Financial Services Bureau’s records of application for payment of stamp duty – related to residential transactions in 2016 – a total of 98.9 percent of homebuyers are Macao residents: only 1.1 percent of transactions were made by legal persons and non-residents. Among those resident buyers, around 50.7 percent of transactions were made by those who owned more than one residential property in Macao.