Official government numbers – which some legislators and economists have questioned – indicate that only 20 percent of Macau residents rent properties. Therefore, the government argues, the problem of increasing rental prices mainly affects non-residents only.
This is not the case however for Mandy Wu, a Macau resident and insurance company employee. Ms Wu started renting when she was just 16. In the past eight years she has rented four increasingly expensive apartments, each one worse than the one before.
The first house she rented cost MOP2,800 a month, an expense she shared with a friend. Her most recent move, three houses later, was in August last year. With a budget of only around MOP3,000 the search was not an easy one.
“I saw many houses, more than 10. Everything was very expensive or very old. The prices did not correspond to the quality, water was dripping from the ceilings, the places were terrible and above all, very expensive”, she recounts.
Ms Wu ended up finding a solution. Today she pays MOP3,300 but the price comes with a catch: “I live in an annex, that’s why it’s cheap. My house is on the top floor, and is not approved by the government. The person renting me the house is the one who built it”.
“The prices have gone up terribly”, she observes. And she expects her current rent to go up next summer.
Buying a property continues to be an impossible dream.
“I’d like to, but I don’t have money for that”, she laments.
Owning and renting
Carmen Chan (not her real name) from Taiwan has lived in Macau for 10 years. She is in a situation she describes as very common: she rents and is a landlord at the same time.
In 2008, when property prices were still low, she bought an apartment. But due to the instability of the market and her expenses as an artist, she decided to rent out the space and move into another one, where she had to pay rent.
“It’s a very common situation for people not to live in their properties”, she says.
She has moved houses six or seven times and always to smaller and cheaper houses each time. The first house she rented cost less than MOP2,000 per month.
“It was an adorable house, with four rooms, it was great”, she recalls.
Since then she has always ended up paying more and living in worse conditions. She is currently paying MOP3,000, but “with a lot less space, a third of the size of the first house”.
Along with living expenses, Ms Chan always has to add the cost of renting a studio, which she needs for her work. In the past she was able to rent two spaces, one above the other, for MOP6,000, but the rent increases led her to move again. Today her home and studio are in different areas of the city. As she needs to transport materials on a regular basis, a building with a lift would be ideal.
“But it’s impossible. Apartments in those buildings cost over MOP5,000. And in buildings without lifts, on the lower floors there is no light, we only see window cages. But we have to accept it.”
Chan also criticises real estate agents:
“The services in Taiwan are much better. There, the client is the priority. Here things are not very clear. It could be prejudice on my part, because I’m not fluent in Cantonese, but I don’t feel comfortable dealing with them”.
Impossible situations
The experience in Macau for Paula (also not her real name), a Portuguese teacher, has not been easy.
“Being here has become impossible”, she says.
She arrived to the territory in August 2012 and spent until October last year looking for a place.
“I saw many houses, about 15,” she says.
At the time she was looking for a one to two bedroom apartment for around MOP5,000, but she encountered a host of problems.
“They lacked light, they were rundown. When I told the agents my budget, they just laughed and said it was impossible.”
During this time she lived with friends in a sub-let house, but eventually, at the request of the landlord, she had to leave. The more she looked, the more rundown and more expensive the apartments became.
“In the beginning the agents wanted three month’s rent in advance, then it became four!”
Finally, in October she found a house. She signed the contract and paid the deposit. The next day her work situation changed dramatically and, fearing that she would not be able to meet her contractual obligations, she called the landlord and the agent and asked if the contract could be cancelled. Despite the fact that she had only signed the day before, it was too late: the landlord would not return the month’s rent she had paid, and the agent kept half a month’s rent. In total she lost around MOP10,000.
Accustomed to renting in Portugal, the teacher blames the local system.
“I think this is mismanagement. If landlords need agents to represent them, then the associated costs should be at their expense. I should not be the one paying a month’s rent to the agency”, she argues. “Three to four month’s rent in advance is absurd. It should be one in advance and one as a deposit. For those arriving in Macau it is very difficult to pay so much.”
No Fair Deals
Catarina Cortesão has lived in Macau for 11 years, and having moved house three times, she has first-hand experience of the price hikes.
“Up to 2008, this was not even an issue”, she explains.
For that reason, when she moved to her second house in 2008, she wasn’t expecting to find herself in a short-term situation. After the birth of her first child, she felt the need for a bigger space and agreed to pay for major work in the kitchen and the bathroom.
“We undertook construction work to the value of MOP60,000 with a long-term perspective.” Then, without warning, in 2010 the landlord wanted to sell the house.
“We were completely taken by surprise. We tried to negotiate, but to no avail”, says the legal advisor.
The rent for the house where the family of four currently resides has also increased. Initially it cost MOP13,000 but in November last year the rent went up to MOP18,000.
“If I didn’t accept it they were going to put it on the market for MOP22,000”, she says. “We do not see increases in our own financial circumstances to keep up with these prices, which are far above the average inflation rate”, she highlights.
The family would like to buy a house, but the prices make this option unaffordable.
“Our current house is worth MOP16 million”, she says.
It’s not only the prices that have changed, but also the conditions of the contracts. “Before, landlords used to paint the houses before renting them out, but now that is the responsibility of the tenant and they don’t even take it off the rent”, she says. In general, over the last few years, the changes in the rental situation have meant houses that are always “a lot worse and 50 to 60 percent more expensive”.
Catarina Cortesão was involved in the “For Fair Rent” petition submitted to the government in November 2012. The group never received any response, but had hoped to see some measures announced in the recent policy address by the Chief Executive. In the absence of any plans from the Executive, Cortesão has some suggestions.
She believes that rental contracts should be for four or five years at least, otherwise the costs involved in moving house become impossible to bear. The property taxation system should also be changed.
The property tax on vacant apartments should be double that of properties that are rented “because [housing] is a scarce commodity in Macau and with more available housing the prices would drop”.
Also, people’s second and third homes should be taxed more heavily, she advocates.
“With this tax, a fund could be created and the government could give a certain amount to help people to cope with the increase in rents”, she suggests.
Catarina dismisses the idea of imposing limits on increases, as that could lead landlords to not renew contracts, opting to start a new one for a much higher price instead.
Heading North
U Kun Kao never considered living in the mainland, but when it came time to move house recently, he changed his mind.
The 54-year-old taxi driver has always lived in Macau, hoping to one day be able to afford a larger and more comfortable house. With the scorching housing market in Macau, last year U and his wife made a decision: to buy a house in Zhongshan city, across the border in Guangdong province. The three-bedroom apartment, bought while still under construction, cost one-tenth of the price it would have cost in Macau, according to U.
“With the sort of money it cost us in Zhongshan, there’s nothing you can buy here,” he says.
According to U, a 20 to 30 year-old house in the northern areas of Macau costs about a million patacas, and in the Avenida Horta e Costa are it costs three million. A brand new apartment cannot be purchased for under five million, and the prices can reach up to eight million if it has three rooms.
“These prices are not accessible for normal people,” he complains.
It is not only the housing prices that make Zhongshan attractive for his retirement years. For the price of a kilogram of vegetables in Macau he can get three kilos there, he assures. The U family are not the only ones who know this: most of his neighbours in the urban development in Zhongshan are also Macau and Hong Kong retirees.
Mr U believes that the housing problem in Macau should firstly be dealt with by building more public housing. But this is not the only problem he says.
“The main reason for the price hikes is the increasing number of migrant workers”, he believes.
The taxi driver was present during Secretary Francis Tam’s recent Policy Address and argues that migrant workers who work in the construction of casinos should be building housing instead.
“In less than three years, housing prices would drop by half,” he concludes.