Many readers will be excused for not being familiar with this French song “Non, je ne regrette rien” (“No, I regret nothing”), written in 1956 and best known through singer Edith Piaf’s 1960 recording.
I am reminded of it though, when it comes to property in Macau. For owners thinking of selling, is there ever a best time to do so without regretting it later? Ah, that we had a crystal ball to be able to gaze into the future!
I have countless examples of clients and friends who bought back in the mid- 2000s and sold on several years later having done extremely well. A 4-bedroom and a 3-bedroom apartment in Hellene Garden, Coloane could be bought in 2004 for HK$1.9M and HK$650K respectively. The same homes have just been sold for HK$12.5M and HK$9M. A 3-bedroom in Sai Van lake, Macau sold for HK$930K in 2004 and is on offer for HK$14.5M today.
There are few places in this world that you can see such gains. Everyone I think would agree that the owners who have held their nerve and ridden the market for the past ten or so years have been fortunate in the capital gains they’ve made. Have there been any regrets? Yes, numerous.
Stories abound of those jumping out of the market too early and then having to rent and be at the mercy of a landlord. One client bought his 4-bedroom unit in Kingsville, Taipa for HK$3.8M and sold delightedly three years later for HK$7.8M. Today I see a similar unit listed for sale for HK$25M. One couple bought on Nam Van lake for just over HK$1M in 2002 and sold for HK$3M four years later, happy then, but regretting it now, as the unit is valued at around HK$8M today and they too are having to hop from one rental to the next.
So what is the message in all of this? It’s my belief that the days of such huge capital gains that we’ve seen over the past decade are behind us. Demand will remain strong, but new blocks of ‘luxury’ high rises, and the opening up of Hengqin for further middle income high rises will provide more supply.
For owners looking to cash in on their gains, prices are softening and I wouldn’t hesitate putting your properties on the market, especially in the case of the bigger units.
And for those still hunting out investments for a good return within a 2-3 year turn around? The small, ugly ‘no hoper’ apartments in central Macau are a safe bet to my mind. The young, low income newlyweds and 20-somethings that have been priced out of the market today, desperately need small affordable entry-point homes that are centrally located near family and friends (and not stuck out at the end of the Cotai strip where swathes of public housing has and continues to be erected).
Units in low rise walk-up buildings can still be picked up relatively cheaply and transformed into bright, cozy, modern homes. Easy to rent while you wait the two years for the sales tax imposed on capital gains to expire, they will be quickly snapped up at a good return for the investor by eager local buyers.