Long-term outlook is positive as more casinos open, fuelling demand for high-income executives, say developers and analysts Macau's property market is under close scrutiny with its gaming and entertainment industry at a crossroads marked by the opening of the US$1.2 billion Wynn Macau. Conservative industry watchers believe sustainable housing demand will depend on whether the major casino operators could deliver profits in the highly competitive gaming sector. Optimists, however, expect prices for top-quality residential developments - the primary beneficiaries of the fast-growing gaming industry - would set records above HK$4,000 per square foot, fuelled by strong demand from an influx of high-income senior executives. They are not worried the building boom might potentially build up into a market bubble. Nicholas Brooke, chairman of Professional Property Services, said home prices would not take off for another 12 to 18 months, when all the casino resorts would be opened. The market was still in the stage of 'watching and waiting'. Macau's gaming and hotel industry would likely turn the corner after the opening of Wynn Macau, he said. Galaxy Entertainment Group's StarWorld - the tallest building in Macau - will open soon, and Stanley Ho Hung-sun's casino in Grand Lisboa will start operation before the end of the year. 'The long-term outlook for the property market is positive,' said Mr Brooke. Standard & Poor's said many Hong Kong developers had earmarked aggressive expansion in Macau in view of the strong economic growth and rising wages. Many casinos have attracted high-income professionals, in turn creating rising demand for quality residential developments, said a spokeswoman for the rating agency. 'It takes time to see how demand and supply come to an equilibrium. It is too early to say,' she said. Overall, home prices rose up to 15 per cent for the first nine months this year, adding up to an accumulated growth of 60 per cent from 2004. Hongkong Land, which plans to launch its joint-venture project by the end of this year, remains bullish on the high-end residential sector. Robert Wong, executive director of residential property at Hongkong Land, said home prices in Macau were between HK$1,000 per square foot and HK$4,000 per square foot. 'It is still far below those in Hong Kong and Las Vegas.' Property prices still have room for growth as overseas funds see the potential of Macau becoming Asia's Las Vegas. 'I do not see any sign of a market bubble building up,' Mr Wong said. 'Most people ask if Macau has the conditions to emerge as Asia's casino and tourism centre. The answer is clear when billions of dollars continue to pour into the enclave.' Hongkong Land has joined forces with Shun Tak Holdings to build a luxury residential-hotel-retail project, known as One Central, in the Nape Area at an estimated cost of HK$6 billion. According to Jones Lang LaSalle, investment in Macau amounted to HK$6.7 billion in the first half of this year, compared with $7.35 billion for the whole of last year. Fifty per cent of the total comes from foreign funds, 40 per cent from Hong Kong investors and the rest from domestic investors. In June, a closed-end investment company, Macau Property Opportunities Fund, raised #105 million (HK$1.52 billion) through an initial public offering on Britain's Alternative Investment Market. Dan Tagliere, a principal at MacauLand Holdings, shares Mr Wong's view, saying prices surged two years ago 'but it's still a very affordable level. Wages are growing tremendously at 13 per cent a year across all professions.' Gregory Ku Ka-ho, managing director for the Macau office of Jones Lang LaSalle, said Macau needed to import 60,000 to 70,000 professional, middle-management expatriates to run hotels, restaurants and casinos by 2010 against a mere flat supply of about 4,000 new flats per year. He expects the price gap between Macau and Hong Kong would narrow. Macau's luxury home prices of HK$3,500 to HK$4,000 per square foot were comparable to those of flats in Tseung Kwan O, he said.