The outlook for Macau’s property market  remains gloomy this year despite Beijing’s incentives to diversify the city’s economy away from the casino industry.

According to JLL in its Macau Year-end Property Review 2019, impacted by the cautious investment sentiment caused by the global economic uncertainty, all property sectors in Macau experienced a significant fall in transaction volume last year.

The total residential sales transaction volume in Macau contracted significantly in 2019.

According to the DSEC statistics, a total of 7,547 residential sales transactions were registered as of mid-November, a fall of 27.2% y-o-y.  Analysts expect the total number of residential sales transactions will be less than 8,000 for 2019 as a whole.

On the supply side, only six projects providing a total of 63 residential units with a total GFA of approx. 3,579.34 sqm were issued with pre-sale permits.

According to DSF figures, a total of 1,147 presale transactions were recorded as of mid-November in 2019, accounting for about 15.2% of the total number of residential transactions.

Presale residential transactions saw a y-o-y fall in both its volume and its percentage of the overall market total.

In 2019, the capital values of high-end and mass-to-medium residential properties fell by 5.3% and 3.6% respectively, while yields recorded at 1.6% and 1.8% respectively as of end 2019.

The number of imported labour in Macau saw a moderate growth in the year, however, the supply of residential units available for lease also increased.

The leasing market was broadly stable in 2019. The rental values of high-end residential properties dropped by 2.7% y-o-y while mass-to-medium residential rental values rose by 1.0% y-o-y.

“Macau’s residential property sector experienced a fall in its transaction volume in 2019 due to the external economic uncertainty.  Transactions were mainly originated from first-time homebuyers, while developers needed to offer various incentives to boost sales."

"Though residential supply from the private sector is expected to be extremely limited in the future, the easing of home purchase policy in Zhuhai, Macau’s economic housing units re-opened for application, and the proposed neighbourhood residential projects in Hengqin, will provide a range of homebuying options for Macau people." 

"This is expected to affect the residential demand in the short to medium term,” comments Jeff Wong, Senior Director of Capital Markets at JLL Macau.

Photo :  Sirio Carnevalino