Macau’s government is considering the launch of a "sandwich-class” housing scheme to fill the gap between public housing and private housing, and to provide the territory’s residents with a new path to property ownership.
The idea arose from the concept of "staircase
housing", proposed by Macau Chief Executive Ho lat Seng in his 2020 policy
address to describe the various tiers of the property market: social housing, economic housing,
sandwich-class housing, apartments for the elderly and private buildings. The
concept is an attempt to define market segments according to people’s differing
needs and purchasing behaviours, in order to solve residential housing
problems.
A "sandwich home" is
positioned as a private property, larger and better configured than an economic
home, whose price lies between the price of an economic home and the price of a
private property. A sandwich home could be sold on the private property market
after a set number of years.
Macau’s government has already
publicly consulted on a sandwich-class housing programme, seeking a consensus
on the definition of "sandwich class", and determining application
eligibility, pricing and lock-up periods.
The consultation text includes two proposed
definitions of prospective sandwich-class homeowners. The first comprises
residents whose income exceeds the upper limit for eligibility to apply for economic
housing, and it takes into account those
whose applications for economic housing rank further down the waiting list for
such housing. The second comprises those whose income level exceeds the upper
limit beyond which they are ineligible to apply for economic housing, and
stipulates that applications for economic and sandwich housing cannot overlap.
The minimum monthly income of
sandwich-housing applicants could be only 50% lower than, 20% lower than, or the
same as the current monthly income ceiling for eligibility for economic housing.
The monthly income ceiling for eligibility for sandwich housing could be higher
than the current monthly income limit for eligibility for economic housing by
only 10%-20%. At present, the monthly income limit for eligibility for economic
housing for a family of two or more people is $77,820. As it stands, this limit
captures more than 80% of the families in Macau who have the means to buy
private properties.
According to figures from Macau’s
Statistics & Census Service, as of the end of 2019, there were 234,059
completed residential buildings in Macau, including private buildings, economic housing and social housing. Among these,
182,827 were private buildings, 36,963 were economic housing, and 14,269 were
social housing.
According to the government's plan,
there will be 28,000 public housing units in the Macau New Urban Zone A and 6,500
public housing units in Wei Long. Social housing units under construction and
elderly people’s apartments currently being built will also be gradually
supplied to the market, totalling nearly 40,000 public housing units. According
to statistics from Macau’s Land, Public Works and Transport Bureau, there are
more than 10,000 private housing units under construction or for which construction
is planned, meaning that more than 50,000 residential units will be supplied in
the future. At present, there are fewer than 200,000 family groups in Macau,
but nearly 230,000 units. It is estimated that in 2040, the territory will have
40,000 more family groups. In addition, the government has reclaimed more than
80 pieces of idle land. Although not all of it will be used for housing
construction, this land is sufficient for the purpose.
Our company believes that if Macau’s
government launches sandwich-class housing, a re-drafting of applicable laws
will be necessary, requiring a great deal of time and entailing significant administrative
costs. Additionally, it remains unknown whether such a scheme can meet policy
expectations. Sandwich housing will complicate Macau’s property market,
although whether it impacts property prices, as such, will depend on specific
pricing and other arrangements. However, if the government itself becomes a
developer, it will inevitably compete with private developers, impacting the
private market. If a sandwich-class housing plan is formulated, it would be best
drawn up to optimise the existing conditions for public housing applications.
Macau is a geographically small territory, and the simpler the legal system around
housing, the better.
Moreover, after the government advanced
the concept of sandwich-class housing, some older property owners began to worry
that its advent would impact their property prices in the future. The hope is that
– if the government introduces the new policy – it will make consideration of Macau’s
230,000 small-property owners a priority. If their rights are affected due to
the launch of sandwich-class buildings, problems will arise, and their impact will
not be able to be ignored.
