Home purchase support plans coming soon

Thursday, May 21, 2009
Issue 708, Page 1 & 2
Word count: 774
Published in : Macau Daily Times

By Poyi (Natalie) Leung

The lawmakers yesterday again gave a tough time to Secretary for Transport and Public Works Lau Si Io, who tried to put through the government’s bill in relations to the Home Purchase Credit Guarantee Scheme.

Yet, by a vote of 16 to 2 the bill passed the final reading at the Legislative Assembly (AL) so that the government will assume a 700 million pataca debt in order to provide 20 percent down payment guarantee for eligible first home buyers.

Six other lawmakers including Fong Chi Keong, Kwan Tsui Hang, Leong Iok Wa and AL vice president Lau Cheok Va abstained from voting.

The actual Home Purchase Credit Guarantee Scheme will be gazetted as an administrative regulation – which does not need to go through the legislature.

In addition, the administrative regulation of the “Four Percent Home Loan Interest Subsidy Plan” will be promulgated at the same time, according to the transport and public works secretary.

In yesterday’s plenary meeting which continued the discussion from last Thursday, almost every of the lawmakers who either just expressed opinions or posed questions to the government officials showed concern about whether the home purchase scheme could bring positive impact to local residents.

Not only might the scheme push residents with no sufficient financial capacity to purchase a home, the lawmakers said the property valuation ceiling being set at three million patacas aroused suspicion that the government indeed wanted to “boost sales in the private property market”.

As the home purchase scheme will be a short-term measure and have an application quota of around 1,160, Fong Chi Keong said eligible permanent residents would all rush to apply before giving it a second thought.

“The unemployment rate is inclined to increase and when the people lose their jobs, they won’t even be capable to repay home loan interest,” he said.

“Instead, a rental allowance will be more appropriate and it can end when the public housing is built,” he added.

Lau Si Io responded that the government was just trying to offer “one more option” to residents, adding promotion would focus on letting people aware of the possible risks of the home purchase scheme.

AL president Susana Chou was among those who did not greatly support the government’s initiative said to mainly “help residents who are neither eligible to apply for public housing nor able to afford an apartment in the private market”.

“This scheme is misleading residents to get them fall into negative equity. And at that time the government will have to shoulder a very big responsibility,” she said.

“The property valuation ceiling seems to me is a means of the government to push up the real estate market. A three million pataca worth of residence is already deemed as luxury in Macau’s standards, so why we have to help those high-income earners?”, she added.

The president also pointed out that it was not a fair policy, as the government was going to bear a 700 million pataca debt for the sake of merely some 1,100 people.

Meanwhile, Kwan Tsui Hang said the home purchase scheme was “unsuitable” to help residents buy their first own homes, but was an act “to stimulate the market which could eventually impose a negative equity threat”.

She also proposed to the government to lower the public housing application requirements, so that the home purchase scheme would no longer be required and as such residents did not need to take the risks.

“The government shall make use of the 700 million patacas to build more public housing instead,” Kwan added.

Chui Sai Cheong said he hoped the secretary would bring the suggestion of lowering the property valuation ceiling back to the chief executive.

Lau said the government was “open” to any changes and would “cautiously think through the suggestion when finalising the administrative regulation”.

According to the introduction of the secretary, Macau Permanent Identity Card holders over 18 years old and together with their family members did not own any real estate in the preceding three years before the time of application, will be eligible to apply for a maximum 20 percent down payment government guarantee to be valid for 15 years.

The applicant however must have to be responsible for at least 10 percent of the down payment.

If the government does not change the property valuation ceiling eventually, residents will also be restricted to buy an apartment at no more than three million patacas in order to benefit from the scheme.

On the other hand, Lau said the “Four Percent Home Loan Interest Subsidy Plan” will have the same application criteria and come into effect the day when it is gazetted.

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