Property prices expected to rise, says Jones Lang LaSalle

Macau’s residential and office sectors are predicted to experience continued growth this year, while the retail property sector is likely to face a drop, according to real estate agency Jones Lang LaSalle (JLL).
The realtor has indicated that Macau’s office sector proved the most robust among all property sectors last year, with dramatic growth driven by low supply and an increasing number of new corporations in the city.
While  overall office capital values surged by 54.2% year on year, overall office rental prices soared by 61.5 percent. “In the leasing market, demand mainly came from the retail and gaming sectors, and government departments,” said JLL Macau’s Capital Markets senior manager Oliver Tong.
“There has been an increasing number of China-based developers taking up office space in Macau, with a plan to expand to Hengqin,” he explained, adding that most of the new companies registered last year were from the wholesale, retail, construction and financial sectors.
The realtor further stated that the overall office vacancy rate remained at a very low level of 6 percent at the end of 2014, while Grade A office vacancy rates rose to 15 percent. “We expect the office sales market to maintain stable growth in 2015, while office rental values will grow by a further  5 to 10 percent,” said Tong.
Residential rental prices are predicted to have a 5 to 10 percent increase this year, due to the strong demand for imported labor. With an array of new entertainment projects due for completion in Cotai, the number of imported workers is expected to grow strongly, pushing up residential demand.
In 2014, according to the agency, both the high-end and mass-to-medium residential sectors recorded a slowdown in growth. Capital values for the high-
end and mass-to medium residential sectors grew by 19.7 and 17.4 percent respectively, while their rental values respectively rose by 7.1 and 12.3 percent.
“With the strong residential deposit and the limited residential supply in the near future, coupled with the Central Bank’s interest rate cut policy, the residential sales market is expected to remain stable in 2015,” said the company’s managing director, Gregory Ku.
“The affordability of imported labor is not that high but at middle level. So living in Zhuhai will be the solution especially for the mass market, and sharing flats will be the trend,” he added.