Oversea-Chinese Banking Corporation has seen a drop of 10 per cent in its mortgage loan portfolio dedicated to Macau business, according to Lou Pou Hong, director and chief executive, OCBC Macau.
In a recent interview with Hong Kong media outlet Sing Tao Daily, Lou spoke of the challenges facing the second largest foreign bank in Macau with 11 branches.
Housing loans, as he pointed out, once accounted for over 70 per cent of the total at the peak of this business segment. However, it has now declined to approximately 60 per cent.
Upwards of 10,000 approvals were made prior to the Covid pandemic, with the number down to some 3,000 last year, he illustrated.
As a result, the amount of the annual issuance of fresh property loans has dropped to just one-fifth of its peak level.
Nonetheless, the banker said that the bank continued to maintain high-quality mortgage loans, with a delinquency rate of less than 0.5 per cent – still significantly lower than the market average of over 3 per cent.
His comments reflected the broader mood of caution surrounding home buying, with the latest residential property price index coming in at 219.9 – well below the comparable level of 268.3 in 2019.
Reflecting on how locals have historically accumulated wealth through property investment, Lou noted that the trend had led to a high proportion of mortgage loans.
Using himself as an example, he bought his first home in 2003, when a unit of over 1,000 square feet was priced at MOP600,000.
The price once peaked at around MOP8 million but has now settled back to over MOP6 million, he said.
