JLL: Government should help people get on property ladder to address housing problems

Macau’s economy and gaming sector rebounded in 2017 amid the active investment sentiment and robust primary residential sales, according to JLL in its Macau Year-end Property Review 2017.

January 16, 2018

Macau and Hong Kong, 16th January 2018 – Macau’s economy and gaming sector rebounded in 2017 amid the active investment sentiment and robust primary residential sales, according to JLL in its Macau Year-end Property Review 2017.

According to the statistics released by the DICJ, Macau’s gaming revenue recorded at MOP 265.74 billion in 2017, up 19.1% y-o-y, putting an end to the negative yearly y-o-y growth that seen in the past three years.  In fact, the city’s gaming revenue had seen monthly y-o-y growth for 17 consecutive months since August 2016.  Both the VIP and mass markets saw y-o-y growth in their revenues in the first three quarters of 2017. As the key driver for the growth of the gaming revenue, the VIP market, which accounted for 56.9% of the total gaming revenue, grew 28.5% y-o-y. 

Macau’s GDP recorded at MOP 284.33 billion, registering a y-o-y growth of 9.3% in the first three quarters of 2017.  The expenditure-based GDP showed that the growth was mainly driven by the gaming-related export of services that grew by 15.3% y-o-y and made up 78.0% of Macau’s total GDP.  During the same period, the performance of other components of the city’s GDP varied.  Private consumption expenditure rose by 1.1% y-o-y, while Government consumption expenditure and fixed capital formation fell 1.1% and 8.0% y-o-y respectively.

During the first 11 months of 2017, Macau’s total visitor arrivals reached 29,557,000, up 5.1% y-o-y.  The majority of the visitors were from Mainland China, making up 68.1% of the total visitor arrivals.  Out of which, 47.9% visited Macau under the Individual Traveller Scheme (ITS).  Visitors from Korea saw a strong y-o-y growth of 34.7%.  The supply of hotel rooms in Macau totalled 36,400, with five-star hotel rooms making up 22,300.  As of November 2017, the cumulative occupancy rate of hotel rooms in Macau rose to 86.9%, while the average length of stay of guests edged up to 1.5 nights. 

The labour market in Macau remained broadly stable in 2017.  According to the DSEC statistics, the unemployment rate stayed low at 1.9%, while the overall median monthly income remained at MOP 15,000 as of the end of the third quarter.  The number of imported labour in Macau increased slightly to 178,492 as of end November, up 0.5% from end 2016. The total resident deposit in Macau rose to MOP 566.41 billion as of October 2017, up 9.2% comparing with end 2016.  

“Macau’s overall economy and gaming sector recovered in 2017, amid the active investment sentiment driven by the launch of several new residential projects.  A few notable sales transactions of private sites and hotels were recorded in 2017.  The economic fundamentals in Macau remained positive, with some major entertainment facilities scheduled for completion in the year.  The market was also expecting the benefits that the completion of the Hong Kong-Zhuhai-Macau Bridge would bring to the property market.  However, the government recently announced that further cooling measures would be implemented to adjust the overheated property market.  Moreover, the Federal Reserve also revealed the plan for interest rate hike and contraction of balance sheet. We expect Macau’s property market will remain stable in 2018, though the volume of property transactions may contract,” says Mark Wong, Senior Manager, Valuation Advisory Services at JLL Macau.


The total residential sales transaction volume in Macau continued to grow in 2H17.  According to the DSEC statistics, a total of 9,789 residential sales transactions were registered in the first 11 months of 2017, up 9.8% y-o-y.

On the supply side, 13 new projects providing a total of 3,266 units or gross floor area of 229,763 sqm were granted with presale consent in 2017.  By the number of units, 71.2% of the total new supply are studio or one-bedroom flats.  Some of the new projects that had obtained presale consent were launched during the year, including Nova Grand, Windsor Arch, Sky Oasis – The Lux Mansions, YOHO Twins, The Trust Legend and La Marina.

The capital values for high-end and mass-to-medium residential properties rose by 8.8% and 5.7% y-o-y respectively in 2017, with growth mainly seen in 1H17, while yields were recorded at 1.4% and 1.6% respectively as of end 2017.

For the leasing market, due to the slight increase in the number of imported labour in 2017 and the improved performance of the gaming sector’s VIP market, the rental values for high-end and mass-to-medium residential properties grew by 8.4% and 8.1% y-o-y respectively.

“The primary residential sales market performed well in 2017, with both the residential sales value and volume recorded growth amid the robust investment sentiment.  In view of this, the government is planning to implement new cooling measures from the tax and mortgage ratio perspectives to cool down the property market.  However, the mortgage ratio tightening measures targeting at non first-time home buyers that the government implemented earlier has not been proved highly effective.  In fact, the key issue for Macau is the shortage of housing supply amid the strong demand from the growing population.  Though in end 2016 the government announced the initiative to put up for sale some sites by means of public auction in 2017, unfortunately it was not successful.  To address the problem of housing shortage, perhaps the government can consider setting up regular land sales programmes, promoting urban renewal and refining the procedures and timeline requirements on construction work” comments Jeff Wong, Head of Residential at JLL Macau.


The office market in Macau remained broadly stable in 2017.  During the first 11 months of 2017, the total number of new incorporations registered in Macau was 4,825, up 19.4% y-o-y.  Growth was seen in most of the industries.

The leasing market saw a mild slowdown in 1H17 but recovered in 2H17 with the improved economic conditions and business sentiment.  According to JLL Macau Office Index, the rental values for the overall office market and Grade A office market grew by 1.9% and 4.5% y-o-y respectively in 2017.

For the sales market, a total of 272 office transactions were registered in the first 11 months of 2017 as shown by the DSEC statistics, up 54.5% y-o-y.  The capital values for the overall office market and Grade A offices rose by 7.4% and 5.7% y-o-y respectively, underpinned by the robust investment sentiment.  Office supply remained low, with the overall office vacancy rate maintained at 8% as of end-2017.  The yields for the overall office market and Grade A office market both recorded at 2.7%.

“It was announced earlier that the Hong Kong-Zhuhai-Macau Bridge would start services in mid-2018.  As the opening of the bridge will help promote the cooperation between Macau and the nearby cities, with industries like tourism and logistics being benefited, we expect to see an increasing number of corporations setting up their offices in Macau.  However, as major corporations’ requirements on office hardware and specifications are in general relatively high, demand for Grade A offices in Macau is expected to increase in the future, while supply is extremely limited,” says Oliver Tong, Head of Retail at JLL Macau.


According to the DSEC statistics, the total retail sales grew by 11.3% y-o-y in the first three quarter of 2017 to MOP 47.24 billion.  Most of the retail categories registered growth.  The retail sales of leather goods and watches, clocks and jewellery recorded y-o-y growth of 21.2% and 19.0% respectively, while cosmetics grew by 15.7% y-o-y.

With gaming revenues resuming growth and the recovery of the retail market, the leasing of retail properties became more stable. The leasing market in the residential areas remained broadly stable but stalemated in the traditional tourist areas like the area along Rua de S. Domingos, with more shop units becoming available for lease.  For 2017 as a whole, the overall retail rental values fell by 8.3% y-o-y.

In the sales market, the number of retail units transacted in the first 11 months of 2017 totalled 528, up 5.6% y-o-y.  Although the total transaction volume remained low, a few notable transactions were recorded in the year.  Two shop units in Rua de S. Paulo were sold for about HKD 120 million and HKD 130 million respectively.  According to JLL Macau Retail Index, the overall retail capital values dropped by 1.6% y-o-y in 2017 while the yields for the overall retail market fell to 1.8% as of end 2017.

“The retail market has improved a bit, however, the leasing of retail spaces in the traditional tourist areas is still weak.  The rental values of retail properties in the core areas are expected to continue to fall, but at a slower rate.  We expect the overall retail rental values to be gradually back to the growth track and see a 5% growth in 2018.  The opening of MGM Cotai, which delayed its opening to January this year due to the disaster caused by Typhoon Hato last year, is expected to bring to the local people and tourists in Macau a new retail experience,” says Oliver Tong.


The investment market was active in 2017.  Land and hotel properties became the focus of the investors.  During the year, two site transactions were recorded in Taipa North District.  The accommodation values of both sites are in excess of HKD 6,700 per sq ft, based on their respective developable floor areas.  In the meantime, Hotel Lan Kwai Fong Macau and The Landmark Macau in ZAPE District were sold for HKD 2 billion and HKD 4.6 billion respectively.  Both hotels come with gaming facilities and the analysed unit rate of their guest rooms is over HKD 10 million per key, based on their transacted prices. 

“The combined value of the above four major transactions totalled over HKD 11.1 billion.  The active sentiment reflected local and overseas investors’ confidence about the outlook of Macau.  We believe the investment sentiment in Macau will remain positive and investors will continue to look for real estate investment opportunities in the city,  with Macau further improving its infrastructure, policies and the other related aspects,” comments Gregory Ku, Managing Director at JLL Macau.

“In view of the overheated property market, the Macau government has expressed its intention to implement new cooling measures to adjust the market.  The measures are expected to be able to reduce the transaction volume in the short term, but unable to solve the core problems of the housing market.  The government revealed earlier a research report on the city’s public housing demand.  The market in general considered the report not being able to reflect the actual situation and having overlooked the relation between the public and private housing markets.  In the long run, we recommend the government to focus mainly on social housing and take economic housing as supplementary when formulating the public housing policies.  Bearing in mind the shortage of land supply in Macau, there may be no sites for building new public housing properties to cater to the ongoing demand in the future when the planned public housing units have been fully absorbed by the market.  The government should explore to solve the housing problems on the basis of sustainable development by re-examining the existing allocation ratio between social housing and economic housing, forbidding economic housing units to be traded in the private market, and at the same time, setting up a property ladder that provides opportunities for home upgrading from the public to private housing segment,” concludes Gregory Ku.

2018 forecast:

​​ 資本值 租值
High-end residential Stable Stable
Mass-to-medium residential Stable Stable
Office ▲0% to 5% ▲0% to 5%
Retail Stable ▲0% to 5%


About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of over 90,000 as of December 31, 2018. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit