JLL say delta bridge had no impact on city’s property market

Senior executives at JLL Macau Jeff Wong, Gregory Ku and Oliver Tong (left to right)

The opening of the Hong Kong-Zhuhai-Macau Bridge (HKZMB) had little to no impact on property prices and sales in Macau, despite the predictions of some Hong Kong analysts, real estate agents at Jones Lang LaSalle Macau (JLL) said yesterday.

At the company’s year-end property review conducted at its premises, Gregory Ku, managing director of JLL Macau, said that the current laws and regulations relating to vehicle plate applications, as well as the 10% stamp duty on foreign property acquisitions in Macau, make it more challenging for those seeking to purchase a property.

Property buyers without a Macau permanent resident identity card are subjected to paying an extra 10%.

“In general, I don’t see the effect [of the HKZMB] right now,” said Ku. “Unless the governments change the policy of the car plate [registration laws] … without requiring people to go through this complicated process. Otherwise, they need to encourage people to have a holiday or a second home in Macau.”

“Macau and Hong Kong will not have any synergy just because of the bridge,” the executive added.

The realtor had similar expectations in 2018, noting then that the bridge would not significantly impact local property prices.

At the time, analysts had suggested that by increasing connectivity between the two semi-autonomous cities, the difference in property prices between them would diminish, potentially leading to a dramatic shift in both markets.

However, JLL believed that the two SARs were using completely different engines to drive their economies, and that they had a different structure of property buyers.

Ku went on to remark that there is an increasing trend among Hong Kong property buyers to consider purchasing properties in Hengqin, due to the more affordable prices and easier vehicle plate registration processes.

“This has been a trend we have observed. The property prices on Hengqin Island are still reasonable and they still expect some benefit from the [Hong Kong-Zhuhai-Macau] bridge,” said Ku.

“Many Hong Kong residents already have [Zhuhai] car plates, so they think it’s more reasonable, as when going to Zhuhai, there’s a direct split road to Hengqin. Prices are also really attractive compared to other Greater Bay Area cities,” he added.

According to the information Ku acquired, there are over 5,000 local residents living in Hengqin. Ku suggested that there is also a growing interest in purchasing property on the island among local residents.

These views on the Macau, Hong Kong and Zhuhai property markets were expressed at the company’s year-end property review yesterday. In its 2020 summary, JLL Macau said that it was expecting a similar outlook for the city’s property market in 2019, in view of the ongoing China-U.S. trade war.

Last year, the residential sales transaction volume in Macau contracted significantly. JLL estimates that there were fewer than 8,000 residential sales transactions for 2019, based on government figures that show that were only 7,547 residential sales transactions registered in mid-November 2019.

Transactions were said to mainly originate from first-time homebuyers, while developers needed to offer various incentives to boost sales.

According to Jeff Wong, senior director of Capital Markets at JLL Macau, the easing of home purchasing policies in Zhuhai and the proposed residential projects in Hengqin will continue to provide a range of home-buying options for local residents in 2020.

In terms of retail spaces, there will be an “oversupply” of them in 2020, as indicated by Oliver Tong, head of leasing at JLL Macau.

“In 2020, we believe that there will be around 1.5 million square feet of new retail spaces coming to the market, of which 25% will be around Cotai,” said Tong.

“In terms of rental performance, it will be under a lot pressure. I’m not saying we don’t have good tenants, but this indicates that we have too much supply,” he told the press. “I would say an oversupply.”