Macau's residential market is poised to start bouncing back next month after stalling in June and July as a result of the curbs put in place by the government, analysts say. While the level of activity may not return to pre-control levels any time soon, there is now a positive outlook for the medium term, underpinned by rising wealth in the city amid expectations of further expansion of its economy, they say. "By next month homebuyers, property owners, developers, and agents will have adapted to the new regulatory regime," said Ronald Cheung, chief executive of the Macau unit of Midland Realty. "Activity will rebound since there is lots of pent-up demand after both homebuyers and sellers took a wait-and-see attitude towards the new regulatory regime during the past two months." Sales of new mass-market homes collapsed to single-digit levels in June and July, versus the average of 1,700 to 2,000 deals a month, he said. "I now expect a volatile market in September from many buyers who held back their purchases in the past three months, as scores get back to work from their holidays, and as market players must by now be used to the new regulations," Cheung said. In June, the Macau government enacted a law requiring developers to complete the foundations of a building and obtain pre-sale approval before they can start selling them. It then mandated the registration of estate agents and required property owners to issue written authorisation before the agents could offer their properties for sale. The measures were aimed at bolstering protection of homebuyers. Before the new controls were put in place, developers offered flats for sale even if their development sites were still empty. "Between now and the end of this year, I expect prices in the mass residential sector to rise by 10 per cent after gaining about half that much in the first half," Cheung said. The law requiring developers to complete work on the foundations of their projects before selling the units would severely curtail supply, driving a further rise, he said. Cheung said other factors would lend further support to both the mass and luxury sectors of the market. "Over the past 10 years, wealth has risen in this city and the economy is widely expected to expand further in the coming years," he said. Echoing Cheung's view, Sniper Capital principal Tom Ashworth said he expected unprecedented economic growth in Macau in the next few years as casino operators reinvested profits from their successful operations into mega-resorts and boosted visitor growth. "Mass-market gaming will be the key revenue driver," he said. "The bridge to Hong Kong will be completed, as will the local light rail project. Annual gaming revenue should be over US$65 billion, up from last year's US$40 billion, and the population will grow from 590,000 to over 700,000." All these factors would feed through to further demand for luxury leased accommodation, he said. Sniper Capital manages The Waterside, an exclusive 59-apartment tower occupying the entire Tower Six in One Central Residences, one of Macau's most luxurious residential projects. It said it had witnessed a further rising trend in leasing, with occupancy now reaching 95 per cent. "The Waterside gives us sufficient exposure to the top end of Macau's residential leasing market," Ashworth said. "There is, however, a gap for mid-market serviced apartment offerings in Macau and we do not rule out becoming involved in this space - either through development or refurbishment opportunities."