Is the worst over for Macau’s hard-hit property market?
Is the worst over for Macau’s hard-hit property market?
With new projects on the horizon and gaming revenues looking resilient, the property market in Asia’s casino capital could now bet on a reversal of fortunes
Macau’s property market appears poised for a rebound, now that gaming revenues in the Asian casino capital are showing signs of a pickup after months of continuous drops.
Sheldon Adelson, the billionaire owner of Macau’s largest casino operator, led a chorus of optimistic voices saying that a turnaround in Macau’s gaming industry is imminent.
“Stabilization appears to be here,” Adelson said in a recent investor call. “We’re very happy that there’s one month that hit the bottom and we have no reason to believe that that’s not going to continue.”
Gaw Capital Partners’ upmarket development Oscar Crescent, which boasts views of the Macau Jockey Club, sold 90 percent or 175 out of 200 units on its first day of launch earlier this month. Prices started at HKD8,500 (USD1,100) per square foot.
“These prices are 30 per cent off what we could have sold them for two years ago,” Goodwin Gaw, chairman of Gaw Capital, told Bloomberg.
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Jones Lang LaSalle (JLL) had declared earlier this month a bottoming-out of the Macau property market. Capital values of Macau’s high-end residential properties fell by 15.4 percent year-on-year in the first half of 2016, while high-end residential rents plummeted by 29 per cent year-on-year in the same period, JLL data showed.
“It’s too optimistic to say there will be a sharp rebound but I would say that prices have hit the bottom already so we believe that the prices will continue to consolidate at the current level, say, within a range of five to 10 per cent,” JLL Macau’s residential property chief Jeff Wong Chi Wai said.
“For the timing being, we believe the market has bottomed out,” Richard Yue, chief executive officer of Arch Capital Management Company Ltd, which is developing the One Oasis project near Macau’s Cotai Strip, told Bloomberg.
Potential homebuyers could descend on the Chinese SAR with the forthcoming opening of casino projects such as Sands China Ltd’s Parisian and Wynn Macau Ltd’s Wynn Palace.
In addition, JPMorgan now expects a 2 percent increase in Macau’s gross gaming revenue by the fourth quarter, Bloomberg reported.
Casino revenues in Macau had fallen 8.5 percent in June, marking the 25th consecutive month of year-on-year drops. In 2014, Chinese President Xi Jinping launched a nationwide anti-gambling campaign that, among other measures, dampened an appetite for using UnionPay, a state-backed bank card, in casinos.
Source: Property Report