It never ceases to amaze me how the lending organizations here in Macau (ok, let’s not mince words, I mean our banks) and the valuation firms can be so shortsighted when it comes to assessing mortgage loans on older properties. In great cities like London, Paris, New York, the older buildings – often in the most central, desirable locations – are the most sought after and expensive, commanding a premium because they tend to be more solidly constructed.
There’s no doubt that the construction of the older buildings in Macau is far superior to the flimsy, ‘build it quick and cheap’ places of recent years that banks fall over each other to lend on.
Case in point: the 55-year-old building called Dai Heng situated on Sai Van lake. Boasting a Praia Grande address and being in the foothills of Penha Hill where some of the most desirable and expensive properties rub shoulders with Government House, this venerable old building has had equally venerable residents over the decades.
Set in a charming neighbourhood of heritage buildings and local restaurants, it is a pleasant 15-minute stroll to down town Macau along a banyan tree lined avenue, with lake views from the balconies and a bus stop to town directly outside.
But any interested buyer asking for a loan is still being given the old story of “maximum loan tenure, together with the property age, may not exceed 50 years” from smiling bank officers, who agree that whilst this is “previous practice”, they’re at a loss as to what to do when the property alone exceeds the 50 years!
This shortsightedness on behalf of the banks means that if a buyer wishes to buy an apartment in a building such as Dai Heng for example, they will be expected to put down at least half the purchase price in cash. And then, if they can find a bank with some imagination or foresight to lend them the balance, the tenure will be so short that the loan becomes prohibitively expensive.
So these lovely old buildings, with their spacious rooms (not like the pokey little spaces in the new builds) become affordable only for the rich; those with plenty of cash to put down. One wonders if this is a subtle form of selectivity, a method of keeping away those less well off?
A more enlightened bank manager who I spoke with recently agreed that common sense and flexibility needs to be employed. “With old buildings we always consider location. In Sai Van, the scarcity of land and few properties in the area will make those that are there more valuable. And we will carry out site inspections to check the building quality”.
So I urge the banks and valuation firms to start adjusting their vision and become more open-minded when it comes to the beautiful old properties Macau is so fortunate to have. These are treasures to be proud of, and should be accessible to a wider range of buyers, not just the cash rich!