Macau's much-hyped luxury property market has slumped with investor sentiment slipping and prices dropping, according to property insiders, with many investors unwilling to commit due to the uncertain economic conditions in the region. Deputy general manager of Colliers International (Macau) Johnny Lai said there was no doubt that the market had cooled, with prices in the luxury sector dropping 5 to 10 per cent in the past two months. 'At the moment I would say that things have slowed down a lot. There is a feeling that things are too pricey, and the general regional environment with stocks not doing well has had an impact,' Mr Lai said. 'Last year, luxury property went up in value between 60 and 100 per cent, and investors are now looking at the prices and then they are taking a good, hard second look.' Mr Lai said in the past few years most of the luxury apartment sales were split equally between Hong Kong buyers, overseas investors and locals. He said interest from Hong Kong and other international investors had dropped off significantly, leaving primarily local buyers behind. Many investors looking to buy luxury properties, most of which are still in the planning or construction stage, are waiting to see if there will be a further price correction. 'There is much less speculation in the market, which in turn creates an adjustment in prices. Stocks in Hong Kong are not doing so well and people just do not have as much money as they used to, and Macau has really seen an impact from this.' The Macau government's announcement in May of a freeze on gaming licences has done little to help the property sector. Executive director of Vigers Appraisal and Consulting, David Cheung, said there was no doubt that the announcement had had an impact on investor confidence. 'The investment sentiments for luxury residential developments have to some extent cooled down due to the halt to issuing further casino licences and the price increase over the past several years. Speculation sentiment is not very strong at the moment.' Property investment has also been affected by delays in the government approval process for major developments in the wake of a corruption scandal that brought down the then secretary for transport and public works, Ao Man-long. Many projects have been delayed by several years and some investors have pulled out. Mr Cheung said the positive drivers for Macau were the increased income of locals, low unemployment, the flow of international investment to the city and limited land supply. He said luxury property in Macau was defined as being about 2,000 sq ft and priced at more than HK$10million. 'Macau is a relatively small place with limited land supply, especially suitable for luxury properties, and we can see the supply on that end will be quite tight,' he said. 'Demand will depend on the flow of foreign investments into Macau and the rate of salary increase for locals.' New releases include the Residencia Macau on the Macau Peninsula and Windsor Arch in Taipa, scheduled for completion next year and 2010, respectively. Sun Kian Ip Group, developer of the Windsor Arch, said it had already spent HK$200 million on a soft launch of its project that had included presentations in London and other offshore capitals, including Hong Kong, as it sought to lure foreign investors. The units will be offered for sale later this year. Ricacorp Macau director Dennis Wong said there were too many 'uncertainties' and investors were holding off to see how things 'panned out'. Mr Wong said he believed it was necessary for the luxury property market to cool off after moving at such a rapid pace in the final quarter of last year. 'The market really needs to digest what happened last year; so many people have already put their money into Macau. There is no doubt the market is really stuck at the moment. We are still getting investors from places such as Japan and South Korea interested, but they are choosing to wait and see what happens in the next six months.'