Real Estate Matters | Macau Property Review 2016

Juliet Risdon

A little earlier than usual, its time to take a look back over the year and review the events of 2016.

The slump in 2015 carried over into 2016, and prices appeared to bottom out in the first quarter of the year and then remain at that level in the second and third quarters.

Around the end of the third quarter, property sales started to pick up, and there was more movement in the market. In this final three months of the year, there has been a small rise prices, and many of the properties that had been stagnant at the lower end of the scale have begun selling again.

Rental prices followed a similar pattern, and anyone renting in the first nine months of the year would find rents reduced by up to 35% from their previous high.

Once again, the biggest demand for rental property was in Taipa as foreign workers try and avoid the logistical issues of buying a car or the horrors of catching a bus.

At the beginning of the year, a nicely appointed 2 bedroom apartment in Taipa that does not have access to any facilities carried an asking price of $3,500,000 with a rental price range of $8,000 – $11,000 per month.

Now that same 2 bedroom apartment in Taipa has an asking price of around $3,700,000 – $3,900,000 with a rental range of $9,000 – $12,000 per month. In both cases a rise of around 10%.

The same holds true for a 2 bedroom apartment in Taipa in a complex with common facilities such as a gym, swimming pool etc, the current asking prices are up approx. 10% from the first part of this year.

As we go ‘up the ladder’, the more spacious and ‘luxury’ apartments remain empty unless they have dropped their rental rates into the mid-range levels below $25,000.

Here is a quick recap of the year in case you have been marooned on a desert island or lost in the jungle for 12 months;

More low cost housing plans were announced by the government, and there were vicious rumours that Hengqin island was finally going to open up access to Macau residents. Yet again, that didn’t happen.

The supply of new apartments into the market was miniscule

The Population in Macau at the beginning of the year was approx 645,000. By the end of 2016 the government estimate is around 650,000, an increase of just 5,000 people

Rental prices have risen approx. 10% from the start of the year.

Property values bottomed out then rose by around the same 10% over the course of the year at the lower end of the market, but luxury prices remain stagnant.

The government had further discussions on ‘rent control’ procedures, but have yet to finalize a concrete plan. Increasing supply by speeding up the Hengqin connection does not seem to be high on their agenda.

Did the government get it right this year ? Below is what we wrote at the end of 2015, and it seems not much has changed;

Well the free market corrected property prices whilst the government is still talking about rent control, delayed border openings, a Taipa Ferry Terminal who’s opening date seems to get further away each year and a light rail system that has NO opening date, so you be the judge.

Coming Up: How to control prices in a rising market, a new perspective is needed.    

Juliet Risdon is a Director of JML Property and a property investor.

Having been established in 1994, JML Property offers Investment Property & Homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.

www.JMLProperty.com

[email protected]

* Figures expressed in MOP unless otherwise stated