Senior executives at JLL Macau Jeff Wong, Gregory Ku and Oliver Tong (left to right)
Jones Lang LaSalle (JLL) Macau released its summary of the property market for the year 2015, along with its forecasted outlook for this year at a meeting with the press yesterday.
Citing trends since the gaming slump began in February 2014, senior members of JLL Macau noted the sub-par performance of the property market last year and expressed concern about market pressures continuing into 2016.
Jeff Wong, head of residential properties, said that the company expects “further drops for capital and rental values for both commercial and residential units in 2016.”
This will be partly caused by “strong tenant bargaining power” and partly due to a substantial increase of supply penned for the next few years.
Around 16,287 residential units are expected be completed between 2016 and 2020 – compared with an average of 2,253 residential completions per year between 2005 and 2015. Representatives from the company said that this might further saturate the market, especially as many of them are high-end properties looking to attract investors and tenants from an increasingly desolate VIP market.
While an excess of properties may be slated for completion in the coming years, they are not being sold nearly as quickly. The transaction volume of Macau’s residential market reached a
record-low last year with just 5,431 residential transactions registered in the first 11 months of 2015, down by a dramatic 24.2 percent year-on-year.
And the poor performance of 2015 is likely to continue into this year.
“In view of the negative growth recorded in most of its economic indicators, the outlook for Macau’s property market is expected to be uncertain in the short term and may have downside pressure in 2016,” Wong told reporters.
“In general, investors are expected to remain cautious and adopt a wait-and-see attitude,” he added.
On the other hand, according to Oliver Tong, associate director of retail properties, the long-term trends may show positive indicators for the years beyond 2016.
Data released from the Statistics and Census Service (DSEC) showed that the labor market was generally stable throughout last year. The employment rate edged up slightly to 1.9 percent in November, upholding what is largely considered to be a healthy rate by most economists.
Furthermore, according to Tong’s colleague, Wong, “Government statistics showed that the numbers of marriage and birth registration have been increasing in the last decade, following the implementation of the open-door policy in Macau […] we expect it will provide solid support to the residential market in the long-term.”
Certainly, Macau shows no signs of slowing the import of foreign workers. November marked a historic high for the city, recording a 7 percent year-on-year rise to 182,246 workers.
However, the proportion of imported workers that are considered “skilled” declined over the course of last year, while the median incomes for all workers simultaneously rose in the third quarter of 2015 by 15.4 percent year-on-year to about MOP15,000. The trends indicate that Macau locals are getting comparatively wealthier.
Another positive note was the government’s recent reversal of the stamp duty.
Managing director Gregory Ku said: “I think it’s a good time for the government to withdraw some of the stamp duties. It’s not fair that many of the buyers who bought a unit two years ago could not sell because of the stamp duty costs.” Staff reporter
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