JLL Macau and Zhuhai General Manager Oliver Tong Wai Lok said yesterday that with the gradual recovery of Macau’s economy, his forecast for this year’s housing prices was “relatively conservative”, with a maximum increase of about five percent for mass-to-medium residential properties, while the prices for high-end residential properties would remain stable, adding he believed that the city’s housing prices will only regain growth momentum from next year.
JLL, formerly known Jones Lang LaSalle Limited, is a global commercial real estate services company, founded in the UK and headquartered in Chicago, Illinois. The company also provides investment management services worldwide, including services to institutional and retail investors, and to high-net-worth individuals.
Tong made the remarks during a press conference for the property agency’s Macau Year-End Property Review 2022 in the JLL Macau office at the Finance and IT Centre of Macau (FIT).
Tong pointed out that due to the continued impact of the COVID-19 pandemic over the past few years and the government’s cooling measures in response to the city’s property market implemented in 2010 and 2018 respectively, the number of residential sales transactions was down “significantly” by 50.6 percent year on year to 2,950 last year, among which the number of pre-sale transactions was fewer than 240, accounting for only eight percent of the overall residential transaction volume.
The capital and rental values of residential properties continued to decline, Tong said, with the rental values of high-end residential properties falling by 15.5 percent year on year in 2022 and that of mass-to-medium residential properties down by 12.8 percent year on year, adding that the capital values of the former decreased by 9.6 percent year on year in 2022, while that of the latter fell by 10.1 percent year on year, both with yields of about 1.5 percent.
Tong quoted figures from the Statistics and Census Bureau (DSEC).
Retail leasing tipped to recover ‘significantly’
Tong also said that as the number of tourists visiting Macau has increased recently, the retail leasing market was expected to recover “significantly”, adding that the number of enquiries about top-tier shop units close to the city’s tourist areas has risen “significantly”, mainly from local retailers selling souvenirs or running pharmacies, recovering about half of their rental value before the COVID-19 pandemic. Tong said he expected the rental values of top-tier retail units for the retail sector to increase by about 10 to 15 percent this year.
Tong quoted DSEC data as showing that as of last year, the yield of top-tier retail properties stood at about 1.9 percent, with a rental yield of about 2.5 percent
Valuation enquiries return to pre-pandemic levels
JLL Macau Director of Valuation Advisory Services Mark Wong Choi Si said during the press conference that with the COVID-19 pandemic being under control now and the relaxation of the local government’s travel restrictions with the mainland and Hong Kong, Macau’s economy was expected to “see a bright future” with the recovery of the city’s economy and rebounding market sentiment. So far this year, the number of enquiries related to valuations JLL received had returned to pre-pandemic levels, Wong said.
The worst period for the property market was likely to be over, Wong said, with retail and residential leasing markets expected to pick up first, thanks to the rising number of Macau’s visitor arrivals in the wake of the easing of the city’s travel restrictions, an improvement in market sentiment and the expected peak of the US interest rate hike cycle.
However, according to Wong, the outlook of the property investment market remains subject to the interest rate environment and is still dependent on the pace of Macau’s economic recovery, under the influence of “external uncertainties and supply chain disruptions”.
The local government launched COVID-19 test-free travel rules between Macau, Hong Kong and the mainland in early January.
Wong noted that DSEC data shows that “residents’ savings” stood 697.43 billion patacas at the end of last year, up 4.5 percent from the end of 2021.
JLL Macau Director of Valuation Advisory Services Mark Wong Choi Si (left), Senior Manager of Leasing Matt Kou Ieng Kit (right), and JLL Macau & Zhuhai General Manager Oliver Tong Wai Lok pose during the real-estate agency’s Macau Year-End Property Review 2022 press conference at JLL Macau’s office at the Finance and IT Center of Macau in Nam Van. – Photo: Yuki Lei
