Roll Of The Dice

Roll Of The Dice


Following a year of global uncertainty all property sectors in Macau have experienced a significant decrease in transaction volume.

According to the DICJ statistics, Macau's gaming revenue recorded at MOP 292.455 billion in 2019, fell 3.4% y-o-y.  The VIP market was under pressure and saw a 17.1% y-o-y fall in its revenue in the first three quarters of 2019, leading to a y-o-y fall of 8.7% in its contribution to the city's total gaming revenue at 46.7%.  The mass market recorded a y-o-y growth of 17.4% in its revenue, offsetting part of the loss in the VIP market.

Macau's GDP totalled MOP 304.27 billion in the first three quarters of 2019, down 3.5% y-o-y. The expenditure-based GDP showed that the fall was mainly due to the contraction of fixed capital formation and balance of trade, which reduced by 22.1% and 1.9%% y-o-y respectively, together accounting for approx. 64.6% of Macau's total GDP.

The downturn was mainly caused by the decrease in the number of major construction projects and the fall in gaming revenue. During the same period, the other GDP components generally recorded moderate growth.  Government consumption expenditure and private consumption expenditure rose by 4.9% and 2.9% y-o-y respectively.

Macau's total visitor arrivals totalled approx. 39.4 million in 2019, up 10% y-o-y. According to the DSEC statistics, the majority of Macau's visitor arrivals came from Mainland China, equivalent to 71.1% of the total as of November 2019, while 46.8% out of which visited Macau under the Individual Traveller Scheme (ITS).

The labour market in Macau was fairly stable in 2019. According to the DSEC statistics, the unemployment rate maintained at around 1.7% while the overall median monthly income stayed at MOP 17,000 as of November 2019. The number of imported labour in Macau hit a new peak of 196,080 as of end November, up 4.0% from end 2018.

"Macau's gaming revenue contracted in 2019, experiencing a negative y-o-y growth in the last three months of the year. It is mainly attributable to the tightened entry visa issuance policy and heightened security measures carried out by the Macau government due to the 20th handover anniversary. Macau's gaming revenue is expected to be back on track and the overall economy to remain stable this year after the temporary measures have been removed." says Mark Wong, Director of Valuation Advisory Services at JLL Macau.

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. 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 of Q4.  The number of imported labour in Macau saw moderate growth in the year, however, the supply of residential units available for lease also increased and the leasing market was broadly stable in 2019.

Jeff Wong, Senior Director of Capital Markets at JLL Macau, comments:

"Macau's residential property sector experienced a fall in its transaction volume in 2019 due to the external economic uncertainty. Transactions 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,"


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