Macau’s first-half home sales plunge as US-China trade war dampened sentiments among investors and developers
- Home sales in the gambling hub plunged 42.2 per cent in the first half from the same period a year earlier, said JLL quoting government figures
Macau’s residential property market has fallen victim to the protracted US-China trade war, as investor sentiment sours and developers hold off on new projects.
Home sales in the world’s largest gambling hub, which sits off the coast of southern China, plunged 42.2 per cent in the first half from the same period a year earlier, to 3,920 registered transactions, said JLL, citing statistics from DSF, the financial services bureau of the Macau government.
The value of properties sold also was crimped by economic uncertainties, according to JLL’s Wednesday report. The prices of luxury homes dropped 3.5 per cent from a year earlier, while the average price of “mass-to-medium” homes, covering everything else, fell by 1.8 per cent.
Home sales in each of the six months of 2019 fell well below 1,138 units, the average monthly transaction volume going back to 2005.
“The transaction volumes of various property sectors have declined significantly due to the weakening investment sentiment caused by the global economic uncertainty amid the ongoing US-China trade war,” said Mark Wong, director of valuation advisory services at real estate company JLL Macau, in the report.
First-half gambling revenue fell 0.5 per cent in the first six months of the year in the casino hub. Revenue fell 5 per cent in January, snapping 29 consecutive months of growth, according to statistics from the Gaming Inspection and Coordination Bureau.
Gambling revenue was pulled down by the VIP market as high rollers stayed away, with income falling 14.5 per cent to 48 per cent of the city’s total proceeds. Mass-market revenue, however, grew 17.3 per cent year-on-year to offset some of the loss, according to the figures first published on July 1 and cited in Wednesday’s report.
Declines in gambling revenue weighed on Macau, causing the economy to shrink by 3.2 per cent in the first quarter. That further crimped sentiments and deterred investors from splashing out on big-ticket purchases such as new homes.
The fall in home sales may also be attributed to cooling measures rolled out to curb demand since March 2018, said Jane Liu, a director at Ricacorp Macau Properties. The local government imposed stamp duties for homebuyers, taxing first-home buyers 3 per cent of a property’s value, rising to 5 per cent for second homes and 10 per cent for a third.
“Demand from investors dropped sharply and now the sales are mostly dominated by first-time homebuyers for apartments costing between HK$4 million and HK$5 million each,” she said.
Zhuhai should become one of the top property markets in Greater Bay Area
“Due to the external economic uncertainty and the easing home purchase policy in Zhuhai, local developers are facing difficulties to adjust upwards the asking prices of their new projects and need to offer various incentives to boost sales,” said Jeff Wong, senior director of capital markets at JLL Macau.
Developers in Macau therefore took a “wait-and-see approach” in the first three months of the year, said the report, only launching projects in the second quarter. During the entire six months just 575 presale transactions were recorded, contributing to about 15 per cent of the total residential transactions.
