Buying Property in Macau
April 29, 2010 - Macau
Property prices rose significantly in Macao beginning around 2002, when the government broke the monopoly of a local gambling magnate, Stanley Ho, and allowed foreign investors to build casinos.
But the financial crisis of 2008 and new government restrictions slowed investment and development in the real estate market.
Prices decreased by about 30 percent, said Philip Gregory, a partner with Network Properties (Macau) Limited. Today, however, activity appears to be picking up.
"We are back beyond where we were during the boom times," said Benjamin Kao, managing director for Macau Land Developments Limited. Real estate prices are 10 to 20 percent higher than they were before 2008.
A report from Macao's Statistics and Census Service for the third quarter of 2009 calculated that the average overall price per residential square meter in the city was 24,154 Macanese patacas ($280 per square foot). Both Hong Kong dollars and Macanese patacas are used.
In Macao's new luxury developments, which are few in number, prices range from 5,000 to 7,000 Hong Kong dollars ($645 to $900) per square foot.
A slightly older, midrange building would command around 3,000 Hong Kong dollars per square foot, with prices going down from there depending on the age and amenities of the building.
Over all, price increases and development are expected to continue as more infrastructure comes to Macao, including a proposed light-rail system and a $10.7 billion bridge to access both Hong Kong and the mainland Chinese city of Zhuhai. Construction on the bridge started late last year.
Currently, foreigners make up 10 to 15 percent of the market for buyers, many coming from Australia, Canada and Britain.
Most foreign buyers are typically single and prefer relatively small apartments, usually under 1,000 square feet, Mr. Gregory said.
There are no restrictions on foreign buyers in Macao. Every purchase is subject to a 3.15 percent stamp duty. In addition, buyers should estimate 1 to 2 percent of the property value in notary fees and deed registration.
Transactions in Macao are typically conducted in Hong Kong dollars, and Macao's currency is pegged at 1.03 patacas to each Hong Kong dollar.
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