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News Release

Hong Kong and Macau

A Slow Property Market in Macau Amidst Global Economic Uncertainty in 1Q09

Due to the global economic uncertainty which has led to cautious sentiment in Macau’s property market, both its residential and retail sectors recorded falls in their capital values and rents in 1Q09, reports Jones Lang LaSalle in its latest Asia Pacific Property Digest.

High-end Residential

The residential sales market remained slow in 1Q09 as buyers were cautious and adopted a wait-and-see attitude amidst the global financial turmoil. The sales volume of residential properties declined by 88% y-o-y for the first two months of 2009.

Banks relaxed their mortgage lending policies in 1Q09, which led to a stronger end-user demand towards the end of the quarter. Prices of some quality apartments recorded a slight increase in March. However, no new projects were launched in the quarter.

Leasing demand weakened and rentals fell as the number of expatriates was reduced and housing budgets were tightened. Nevertheless, some tenants took advantage of the lower rentals and upgraded to larger units, offsetting some of the negative impacts on higher-end properties.

On the supply side, a total of 763 residential units were completed in 1Q09, and a further 3,812 units are expected to be completed for the remainder of 2009.

In 1Q09, capital values and rents of high-end residential properties fell by 7.3% and 10.6%, respectively, mainly due to reduced demand. Investment yields edged down to 3.1%.

As companies will remain cautious about expansions and housing budget, leasing demand for high-end properties will remain soft, which may cause rentals to fall further. 


Retail sales momentum slowed down as a result of weaker consumer confidence and the reduced number of visitor arrivals  During the first two months of 2009, visitor arrivals fell by 8.5% y-o-y, while gaming receipts fell by 16.2% y-o-y.

Retailers were generally cautious about expansions. However, with its limited supply and favourable location to enjoy high shopper flow, retail space in core areas continued to attract retailers’ attention.

Rentals and capital values of high-street shops fell by 11.6% and 11.9%, respectively, in 1Q09. Yields were relatively stable and edged up to 6.5%.

Macau’s tourist-oriented economy is set to experience a marked slowdown in 2009. Long-haul visitor arrivals will particularly be affected, while the number of business travellers will be reduced due to companies’ tighter travel budgets. Domestic consumption may contract as a result of weaker consumer confidence caused by the rising concern over job security and potential salary cuts.

Looking on the bright side, the reduced new supply resulting from the suspension of some of the integrated resort projects on the Cotai Strip is set to alleviate the pressure of competition and can offset some of the negative impacts on retail rents.