By the end of February this year, out of the 1,932 legally registered applications, 1,880 owners proceeded to select units, according to data from Macau Urban Renewal. However, Wong indicates that the actual purchase rate may be much lower than the number of registrations: “In 2019, it was merely an intention registration, without signing purchase contracts or real transactions. A lot of time has passed, and prices have dropped several times. At the time, the market was still booming; now housing prices have fallen by more than 30 percent. The situation is completely different; we estimate that about 70 percent of registrants have given up on the purchase.”
Housing for exchange allows former Pearl Horizon buyers to acquire units at the original purchase price. However, the pre-sale period extended over several years, resulting in a significant disparity in prices per square foot—from just over 3,000 to more than 12,000 patacas—which led to significant differences in acquisition costs among buyers. “Prices have dropped a lot. Furthermore, there are major differences in typologies between ‘Pearl Metropolitan’ and ‘Pearl Horizon.’ Previously, many units could be converted from T2 to T3; now this is no longer possible—there are only T2 units with two rooms. For families of four or five people, this is not sufficient, leading many to give up on the purchase,” explains Wong.
Kou Meng Pok, president of the General Union of Pearl Metropolitan Owners and former Pearl Horizon owner, states that he is “cautiously optimistic” about the sale of housing for exchange, as most owners will be strongly influenced by market conditions: “If prices in Macau were at a high level, perhaps some would buy. But with the current economic situation, many are reconsidering,” he concludes.
Kou also highlights that, under current legislation, housing for exchange can only be sold to former Pearl Horizon owners and cannot be sold to third parties. Therefore, he suggests that the Government promote reasonable adjustments to the legal framework. “We are talking about the rights and interests of more than 1,900 owners; this is also an important test of the sustainability of urban renewal policies in Macau.”
In addition to falling prices, the increase in housing supply in recent years has also reduced interest in housing for exchange. “In 2019, there was a certain quantity; in 2021, more than 5,000 units; and in 2023, another 5,000. Adding it all up, the supply in recent years has already surpassed that of the previous 10 to 15 years,” explains Wong. He further adds that “28,000 public units are planned in Zone A of the New Landfills, of which only half have so far been placed on the market. If all are made available, there will be even more pressure on prices.”
Regarding the pricing of housing for exchange, Wong considers the situation embarrassing: “Some bought housing for 3,000 or 4,000 patacas per square foot, which seems reasonable if they compare housing for exchange at the same price. But others paid 6,000 or 7,000 for the same type of unit. The price doubles; this creates a dilemma.”
Furthermore, a new development in the Red Market area was recently launched at 4,500 patacas per square foot, becoming a new price benchmark in the market and further weakening the competitiveness of housing for exchange: “If even in good locations new buildings are sold at reduced prices, buyers with greater economic power will continue to wait,” concludes Wong. If the housing-for-exchange units are not all sold, dealing with the remaining units will be problematic: “If they are not all sold, will they be relaunched on the market? And at what price? If the price is too low, it will negatively affect the private market; if it is high and they don’t sell, it is equally a problem.”
Intermediate Solution
Deputy Song Pek Kei considers it quite likely that many of these housing units will not be sold, suggesting that Macau Urban Renewal should “first ascertain the real purchase intention of the owners; and, simultaneously, study the feasibility of converting the remaining units into housing for the middle class.”
Faced with the possibility of more than a thousand units remaining, a more market-oriented approach or integration into urban renewal policies can be considered: “The urban renewal company, during the reconstruction of old areas, can adopt a ‘house-for-house exchange’ model. If the adhesion rate is sufficient, the reconstruction can successfully move forward. The coexistence of housing for exchange and temporary accommodations provides more options for residents, who can choose between exchanging houses or temporarily relocating while waiting for the completion of works,” argues the deputy.
