According to JLL's Macau Year-end Property Review 2019, all property sectors in Macau saw a major drop in transaction volume last year, owing to the cautious investment sentiment induced by global economic uncertainty. villa
According to the DICJ, Macau's gaming revenue in 2019 was MOP 292.455 billion, down 3.4 percent year on year. The VIP market was under pressure, with sales falling 17.1% year over year in the first three quarters of 2019, resulting in an 8.7% drop in its contribution to the city's overall gaming revenue at 46.7 percent. The mass market saw a 17.4 percent increase in sales year over year, partially offsetting the decline in the VIP market.
In the first three quarters of 2019, Macau's GDP was MOP 304.27 billion, down 3.5 percent year on year. The contraction of fixed capital formation and balance of trade, which decreased by 22.1 percent and 1.9 percent percent y-o-y, respectively, accounted for approximately 64.6 percent of Macau's total GDP, according to the expenditure-based GDP.
The decline was mostly due to a reduction in the number of major construction projects and a drop in gaming revenue. The other GDP components grew at a slower pace over the same time span. Government and private consumption expenditures have increased by 4.9 percent and 2.9 percent year over year, respectively.
In 2019, Macau's overall tourist arrivals is estimated to be 39.4 million, up 10% year on year. According to DSEC statistics, the majority of Macau's visitor arrivals remained from Mainland China, accounting for 71.1 percent of total arrivals as of November 2019, with 46.8% of those arriving under the Individual Traveller Scheme (ITS). Macau's tourist arrivals increased by 13.2 percent y-o-y, with mainland tourists remaining the main growth factor. The number of tourists from Hong Kong increased by 18.6 percent year over year. As of the end of November 2019, Macau had a total supply of 37,200 hotel rooms, with 24,400 of them being five-star hotel rooms. The total occupancy rate of hotel rooms in Macau was 91.3 percent, with visitors staying an average of 1.5 nights.
In 2019, Macau's labor market remained relatively stable. According to DSEC figures, the unemployment rate remained at 1.7 percent in November 2019, while the total median monthly income remained at MOP 17,000. As of the end of November, the number of imported workers in Macau had reached a new high of 196,080, up 4.0 percent from the same time last year. The total resident deposit in Macau increased by 3.4 percent to MOP 657.26 billion at the end of October 2019, compared to the same period last year.
"Macau's gaming income fell in 2019, with negative year-over-year performance in the final three months of the year. It is primarily due to the Macau government's tightened entry visa issuance policy and increased security measures in honor of the 20th anniversary of the handover. After the temporary measures were lifted, Macau's gaming income is expected to return to normal and the overall economy to remain stable this year. In light of the ongoing US-China trade war, we anticipate a similar outlook for Macau's property market in 2020 "JLL Macau's Director of Valuation Advisory Services, Mark Wong, says
In 2019, the overall number of residential sales transactions in Macau decreased significantly. According to DSEC data, there were 7,547 residential sales transactions reported as of mid-November, a decrease of 27.2 percent year over year. We estimate that the total number of residential sales transactions in 2019 will be less than 8,000.
Just six pre-sale permits were released for a total of 63 residential units with a total GFA of approximately 3,579.34 sqm on the supply side. According to DSF data, 1,147 presale transactions were registered as of mid-November 2019, accounting for 15.2 percent of all residential transactions. Both the number and the percentage of the total market for pre-sale residential transactions decreased year over year.
High-end and mass-to-medium residential property capital prices dropped 5.3 percent and 3.6 percent in 2019, respectively, while yields were 1.6 percent and 1.8 percent at the end of the year. The number of foreign workers in Macau increased slightly this year, but the number of residential units available for lease increased as well. In 2019, the leasing industry remained relatively stable. Rental prices for high-end residential properties fell by 2.7 percent year over year, while rental values for mass-to-medium residential properties increased by 1.0 percent.
"Due to the external economic instability, Macau's residential property sector saw a drop in transaction volume in 2019. First-time homebuyers accounted for the majority of transactions, and developers were forced to provide different offers to improve sales. While future private sector residential supply is expected to be extremely restricted, the easing of home purchase policies in Zhuhai, the reopening of Macau's economic housing units for application, and the planned neighborhood residential projects in Hengqin would provide a variety of homebuying options for Macau residents. In the short to medium term, this is expected to have an effect on residential demand "JLL Macau's Senior Director of Capital Markets, Jeff Wong, remarks.