SAR Government decided not to extend the Four Percent Interest Subsidiary Scheme for home purchases from 1 July as mortgage interest rates continued dropping.

The decision was made after a caution study and a general evaluation on the real estate market and other economic conditions in the SAR, so as to ease the burden on public finance.

The Four Percent Subsidiary System was a short-term measure implemented in August 1996 to facilitate the real estate industry and to help first-time homeowners with a property budget less then 750 thousand.

However, over the last couple of years, mortgage interests rates have been receding from the height of over 10% to the current rate of around 5%.

Under the Four Percent Subsidiary Scheme for home purchases, over 14,000 applications had been approved, resulting to a liability of more than four billion patacas in total for the public finance, spaning from 1996 to 2012.

With the dropping interest rates and property prices, and the Government's effort in stimulating the market by simplifying related legislation and taxation system, property market in Macao has shown signs of recovery since last year. Meanwhile, the liberalization of the gaming industry, was also believed to be helpful to the revitalization of the property market.

The government made its decision not to extend this system after a careful study of the issue. According to the Office of the Secretary for Transport and Public Works, resources would be reallocate carefully and effectively, focusing on stimulating economic growth.