Residential rents edge higher as new projects enter market

The residential rental market is showing signs of steady growth, with newly completed housing projects helping push up rents in Taipa and Coloane, according to Centaline Macau.

The property agency said the entry of new developments into the rental market has been a key driver of higher rents this year, particularly for newer, smaller units equipped with clubhouse facilities and other amenities.

In Taipa, the phased move-in of residents at The Zenith during the first half of the year has added a significant number of rental listings to the market. The development mainly offers smaller units, while newer facilities have allowed some apartments to command rents of around MOP20 per square foot, according to John Ng, senior regional sales director at Centaline Macau.

The higher rents achieved by these new units have helped lift the overall rental level in Taipa, Ng said.

Government data also points to an increase in rents in the area. The average residential rent in Taipa reached MOP139.6 per square meter of usable area in the second quarter, up 1.16% from a year earlier.

Coloane has recorded an even stronger increase. Average residential rents reached MOP155.5 per square meter in the second quarter, up 2.37% year-on-year, according to the Statistics and Census Service (DSEC).

Centaline said demand for properties in Grand Oasis has remained strong, noting that a mid-floor unit measuring about 1,509 square feet was rented for around MOP20,000 last month.

The unit had previously been rented for about MOP18,000, representing an increase of more than 10%, he said.

Across Macau, the average residential rent reached MOP139.5 per square meter in the second quarter, up 0.7% from MOP138.5 a year earlier. Rents on the Macau Peninsula remained broadly stable compared with the same period last year.

The rental market’s steady performance comes as residential prices have declined significantly in recent years, creating a divergence between property prices and rents.

Centaline said rental yields for quality residential properties have generally risen to more than 3%, improving their appeal to investors seeking returns from property.

With rental yields now above some traditional deposit rates, investors may find residential properties more attractive as an income-generating asset, while also retaining the potential for long-term capital appreciation if rents continue to rise, the realtor said.

The current market conditions may also influence the decisions of tenants weighing whether to continue renting or purchase a home.

The Centaline executive said relatively low mortgage rates have narrowed the gap between monthly mortgage payments and rents. For some households, buying a home “could provide greater certainty over monthly housing costs while reducing exposure to future rent increases.”