The property market in the region is expected to progress steadily in the second half of the year despite the plummeting gaming revenue, according to analysts at the local branch of Jones Lang LaSalle Incorporated, who urged investors to rest cautiously optimistic.
During the company’s mid-year review yesterday afternoon, associate director Alvin Mak forecast that the impending wave of Cotai resorts and casinos would more than likely buoy the residential market, as the region will be bracing itself for a massive legion of immigrant employees.
“Will the city’s pessimistic situation linger? We don’t think so, as the Cotai Strip’s construction is in full swing; the future sees six major projects, with the Galaxy Phase Two already implemented. The other five will reach completion in the coming two or three years. They will bring with them over 17,700 rooms, 2,800 gaming tables and 2.4 million square feet of retail space,” said Mak, adding that some prospective Hengqin flat-buyers have abandoned their plans and returned to look for apartments in Macau.
The transaction volume of residential units in the first five months of this year saw a year-on-year drop of 36.5 percent. However, Jeff Wong, director of capital markets at Jones Lang LaSalle (Macau), said the market prospects remain good.
“We expect the imported labor force to continue increasing, which will provide a solid support for the rental market. As for the luxury market, there will be much more pressure on it, especially those [buildings] located near the casinos, most of whose occupants are working in the gaming sector. But we believe that most of the correction has been realized already. So for the remaining half of this year, it may be in the range of five percent only,” said Wong.
The capital values of high-
end units and mass-and-medium units went down by 17.1 percent and 11.6 percent respectively year-
on-year in the first half of the year, while the rental values of the properties also respectively suffered declines of 11.7 percent and 5.5 percent as of the end of last year.
According to another JLL associate director, Oliver Tong, the central district, known for its exorbitant rents, became affordable to foreign brands after landlords lowered their prices by 30 percent. In addition, Tong foresaw “more vehement competition” in the retail market as large malls will soon multiply across the Cotai Strip.
The region’s rental market for office space has managed to withstand detrimental impact from the depressed gaming economy, with an increase in rental value of 0.5 percent since the end of last year. Rents of A-list real estate have even enjoyed a 5.7-percent increase. Despite this, the entire market’s capital value slipped 4.8 percent, following the gaming sector and mainland-invested enterprises’ weakening demand for offices in the territory. Staff reporter
centaline: property prices to pick up in third quarter
Centaline (Macau) Property Agency Limited is expecting local housing prices to grow by between three and five percent in the third quarter, in contrast to falling transaction volumes. The coming batch of flats to be rolled out by property developers is also expected to push up housing prices by at least 20 percent in the fourth quarter.
No Comments