Macau home prices drop 10pc as gaming revenue slumps
A slump in gaming revenue, the mainland crackdown on corruption and competition from nearby Hengqin Island in Zhuhai have combined to drive home prices in Macau down 10 per cent, and the fall is expected to extend into the new year, according to property agents.
After home prices soared 50 per cent since 2011, agents projected a 10 per cent correction this year and a further 5 per cent drop next year in light of declining gaming revenue, which accounts for 70 per cent of Macau's economy.
Centaline (Macau) senior manager Roy Ho Sio-hang said home prices had dropped 10 per cent after peaking early this year.
After the government rolled out a raft of cooling measures in April 2011, the number of residential transactions plunged 30 per cent to 12,000 last year from 16,910 in 2012, according to data released by the Macau Statistics and Census Service. Ho expects the number of transactions to drop a further 40 per cent to as low as 7,000 this year.
Ronald Cheung, the chief executive at Midland in Macau, said home prices started to fall in September after Macau reported a drop in gaming revenue.
The Gaming Inspection and Coordination Bureau said last month gross gaming revenue fell 23.2 per cent year on year to 28.03 billion patacas. It was the fifth straight monthly decline and the largest on record since the city started collecting data in 2005.
Analysts attributed the fall to President Xi Jinping's campaign against corruption, which has dented spending by high rollers in Macau, the only place in China where casinos are legal.
Cheung said rapid development in Hengqin would attract first-time homebuyers.
"Home-seekers are eyeing buying opportunities in Hengqin where prices are just half of those in Macau," he said.
Hengqin came under the spotlight after the media reported that the border crossing between Macau and the island would start operating on a 24-hour basis and the move would be announced at the commemoration of the 15th anniversary of the Macau special administrative region on December 20.
"We have seen increasing numbers of home-seekers viewing new flats on the Zhuhai island in recent weeks. It is particularly attractive to those who do not own a home in Macau," Cheung said.
Home prices in Hengqin were 40,000 yuan (HK$50,400) per square metre, while those in Macau were 100,024 patacas per square metre, he said.