For those of you who feel you’ve missed the boat on property investment in Macau, don’t despair. With a little bit of perseverance and luck, there are still some hidden gems to be found in the city.
Although they might be few and far between, there are still some properties in Macau that can be bought for an affordable HKD $4m and transformed into cozy homes. Because there is such a shortage of smaller rental properties in Macau these days which are clean and well furnished, studios plus one and two bedroom units make excellent investments to those buyers lucky enough to find them.
You’ve got to be quick though; in a blink of an eye, they will be gone. However, with a ready deposit and a speedy real estate agent on your side, purchases are still possible.
Ideally, you need to take time to put in the legwork yourself first and spend weekends exploring the narrow streets and alleys of the older parts of Macau, Taipa and Coloane village. This is to decide on the areas you feel will be most desirable to potential tenants. For example, you want to think about something that is within 10 or 15 minutes walk from a business district, hotel or casino. Befriending local ‘mom n pop’ agents in these areas or getting hold of property companies such as Ambiente who have a passion for renewal of old buildings certainly is a good start to getting the ‘inside track’ into what’s for sale. Crucially, these agents will have connections with good contractors to help with any renovation needed.
If you can be prepared to look past the exterior of some of the seemingly grubby and run-down buildings, and if you’re willing to tackle a few dark dingy stairwells in walkups with a few floors, there are some truly wonderful success stories to still be had. Some imagination, a modest budget for face-life, and furniture plus a desire to inject a bit of charm and love into these places will undoubtedly earn you a handsome capital gain over even a couple of few years.
For example, take two tiny properties found back in 2006 in an old walkup adjacent to the lovely San Lourenco Church and gardens. Purchased for HKD $400,000 each, the owners gave them a total renovation, taking them from cramped two bedrooms with barred up windows, into open, spacious studios with window seats to enjoy the views. Quality finishes of teak wood flooring and Italian tile bathrooms were added in alongside original artwork, double glazed windows, and modern kitchenettes. These were then rented out immediately to executives from nearby hotels at a 12% yield, and in early 2013 they were both sold for HKD $2.9m and then again in June 2018 for HKD $3.6m.
Another walkup near St. Paul’s bought for HKD $1.8m in 2011 was modernized with open kitchen, larger bathroom, new windows and simply furnished. It was rented out as soon as it was put on the market, and earlier this year was sold for HKD $3.5m.
Another one bedroom apartment near the Portuguese embassy, a 5/F with lift and rooftop, was sold in March 2018 for HKD $3.6m. Minor work was carried out – repainting and new furniture was added from IKEA. It was rented out easily for HKD $11,000 a month, giving the owners a 3.7% return. The real magic happened soon after – it was an almost immediate capital gain; four weeks later it was revalued by one of the banks at HKD $4.1m!
There are yet more stories from the quaint Old Taipa Village. A superbly located 900 sq. ft. two-bedroom, one-bathroom walkup on the edge of the village looking out over Galaxy Resort was bought for HKD $2.35m in 2009. It was rented out for a 7% yield and today, the one next door, of the same size, recently sold for just over HKD $6m.
Whilst the buildings in which these places are usually old, there’s such an acute shortage of small well-located properties in Macau – especially for young locals who are looking to perhaps get married and move to a place of their own. The banks are not blind to the financial potential of buying and modernizing apartments within – and for first-time buyers, they can get as much as a 90% mortgage. Some banks are more helpful than others, no doubt, but again check with your friendly estate agent for any banking relationships they can introduce you to. If you can demonstrate a regular income they should look favorably on giving mortgage support.
So for those of you with a little spare cash and an adventurous spirit, jump in and get in touch with us at Ambiente – there are deals still to be had!!
For any real estate-related inquiries, don’t hesitate to contact Suzanne Watkinson:
*All views expressed are the author’s alone