Mortgage loans decline 38 pct as property market slows

New approvals of residential mortgage loans in Macau declined 38.4 per cent year-on-year during May to MOP3.7 billion from MOP6 billion, the data on the Mortgage Loans Statistics from the Monetary Authority of Macau published yesterday reveals. The trend in mortgage loans is similar to the reality of the Macau property market, as the number of transactions during the fifth month of the year decreased 21.5 per cent year-on-year. While in May 2014 there were 741 property transactions, that number dropped to 582 transactions in May 2015. The price per square metre also dipped from MOP105,260 to MOP90,134. In terms of month-on-month changes, new residential mortgage approvals were cut by 14.5 per cent from MOP4.4 billion, as the number of transaction went down 12.3 per cent from 664 transactions in April. The majority of mortgage loans were approved to Macau residents, in the amount of MOP3.6 billion, while non-residents borrowed MOP0.1billion. Concerning local residents’ new mortgage loans, there was a decrease of 39.8 per cent year-on-year from MOP5.9 billion. And while non-residents hold around MOP0.1 billion of the total it still means an increase of 43.4 per cent in comparison to May 2014. Commercial real estate loans down The commercial real estate loans market also registered a decline from 2014 to 2015. While in May last year new commercial real estate loans approved totalled MOP5.6 billion, this year that value went down to MOP4.1 billion, a 26.4 per cent year-on-year decline. However, this change was more significant in month-on-month terms, as the value of new approved loans for commercial real estate was cut by 55.4 per cent from MOP9.2 billion in April this year. As with residential mortgages, local residents hold most of the amount borrowed as commercial real estate loans. Residents in Macau asked for MOP3.6 billion of the total MOP4.1 billion granted, which means a share of 87.8 per cent of total loans for commercial purposes. Still, the amount borrowed by residents dropped 33.7 per cent year-on-year from MOP5.5 billion and 53.6 per cent month-on-month from MOP7.8 billion. The statistics also demonstrate that the funds loaned to non-residents to buy commercial real estate are increasing. While in May 2014 residents asked for around MOP0.1 billion, in May 2015 that value went up to MOP0.5 billion, a year-on-year increase of 348 per cent. However, by comparison with April 2015, the value of the funds loaned to non-residents dropped 65 per cent from MOP1.4 billion.