Prices could rise further, (in Macau) according to Hongkong Land executive director for residential property Robert Wong Yau-chung, who said cheap Chinese properties prices could go up by another 50 percent "conservatively" in the next few years.
Property professionals in Macau say Wong could well be right. "For luxury flats, getting 50 percent is no problem. It's not a lot," Midland Realty Macau chief executive Ronald Cheung Yat-fai said.
Jones Lang LaSalle Macau managing director Gregory Ku Ka-ho said base prices were low to begin with. "We're not talking about HK$10,000 psf where a 50 percent increase means HK$5,000. You're talking about HK$3,000 to HK$4,000. A further 50 percent means an increase of only HK$1,000 to HK$2,000," Ku said...
...All this, however, is small comfort to the ordinary Macau resident as prices are running ahead of affordability. For Cheung, one of the reasons for this was the developer's fixation on size. For example up to 2007, the new flat supply was mostly, if not all, at over 1,000 square feet with two-bedroom units having an area of 1,100 sq ft. For three-bedroom and four-bedroom units, the area was 1,700 sq ft and 2,300 sq ft, respectively...
...With average market prices standing at HK$2,000 psf, a 2,000 sq ft flat would cost HK$4 million. True, salaries have risen over the years, doubled even, Cheung said, but, he added, a buyer with a job at Lisboa casino earning HK$18,000 a month would find it difficult to keep up with the payments. "HK$4 million will require about HK$20,000 in monthly mortgage payments, how can you keep up?" Cheung said.
Wong of Hongkong Land last week pointed to a raft of statistics that painted a rosy picture for Macau's workers. Wong said annual wage growth was 12 percent for Macau compared with 1.4 percent in Hong Kong. He also said 70 percent of transactions in Macau in 2005 did not require mortgages.
Cheung said most people could only afford prices of up to HK$2 million. Ideally, he said flat sizes should come down with 600 sq ft to 800 sq ft being suitable for a two-bedroom unit. For three-bedroom and four-bedroom units, sizes of 1,200 sq ft and 1,700 sq ft, respectively, would be enough. "There is no supply for this kind of demand in the market," Cheung said.
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