House prices down by 2.98% y-o-y in Q2 2019

Macau’s housing market is now cooling rapidly, as slower economic growth in Mainland China is hitting Macau’s gaming sector. The average transaction price of residential units fell by 2.98% during the year to Q2 2019, in contrast to a y-o-y rise of 6.68% a year earlier. It was the first annual decline since Q3 2016. Quarter-on-quarter, house prices increased 1.4% during the latest quarter.

Home sales in Macau plunged 42.2% in the first half of 2019 as compared to the same period last year, according to JLL.

Macau’s housing market grew strongly in the past three years, supported by economic growth and massive infrastructure investments. The economy was estimated to have expanded by 4.7% in 2018, down from a spectacular 9.1% in 2017. This was a sharp turnaround from y-o-y GDP declines of 0.9% in 2016, the extraordinary decline of 21.6% in 2015, and 1.2% in 2014.

  • The 200,000 sq. m. Taipa maritime terminal began operations in June 2017, increasing travel within Macau and its neighbouring cities, and providing direct connections to the planned light rail transit system.
  • Construction of the Gongbei tunnel, the only link connecting Zhuhai with the Hong Kong-Zhuhai-Macau bridge, started in April 2017. The bridge is scheduled to open this year.
  • The Shenzhen-Zhongshan tunnel, a key infrastructure development in the Greater Pearl River Delta, is also under construction. The project, scheduled for completion in 2020, will reduce the average travel time between Shenzhen and Zhongshan from two hours to less than 30 minutes.
  • Beijing has also committed to a comprehensive Guangdong-Hong Kong-Macau Bay Area development plan to increase connectivity, trade and investment between the three regions.

However, the housing market is now weakening, as investor sentiment sours and developers hold off on new projects mainly due to external economic uncertainty caused by the US-China trade war and the Brexit, among others.

Rents, rental yields: no yields data available for Macau.

Recent news. Macau’s economic growth is expected to slow to 4.3% this year and to 4.2% in 2020, amidst falling gaming revenues, according to the International Monetary Fund (IMF). In July 2019, gross gaming revenues for Macau casino operators fell by 3.5% y-o-y to US$3 billion, based on figures from the Gaming Inspection & Coordination Bureau.