Macau’s property market to remain stable in 2H19 amidst tight residential supply

July 24, 2019

Macau and Hong Kong, 24th July 2019 – Property transaction volume in Macau fell significantly in 1H19 due to the ongoing US-China trade war.  Investors are also expecting a higher yield from their real estate investments, according to JLL in its Macau Mid-year Property Review 2019.

According to the DICJ statistics, Macau’s gaming revenue recorded a y-o-y fall of 0.5% in 1H19 after growing for 29 consecutive months since August 2016.  The VIP market was under pressure and its revenue saw a fall of 14.5% y-o-y in 1H19, down to 48.0% of the city’s total gaming revenue.  The mass market recorded a y-o-y growth of 17.3% in its revenue, offsetting the loss in the VIP market.

Macau’s GDP totalled MOP 102.58 billion in the first quarter of 2019, down 3.2% y-o-y.  The expenditure-based GDP showed that the fall was mainly due to the contraction of fixed capital formation which reduced by 32.1% y-o-y, accounting for approx. 11.7% of Macau’s total GDP. During the first quarter, the other GDP components generally recorded moderate growth.  Private consumption expenditure, balance of trade and government consumption expenditure rose by 2.1%, 2.6% and 4.1% y-o-y respectively.

Benefited by the opening of the Hong Kong-Zhuhai-Macau Bridge, Macau’s total visitor arrivals recorded at 20,185,000 in 1H19, up 20.6% y-o-y.  The majority of the visitors were from Mainland China, accounting for 70.9% of the total, while 47.8% out of which visited Macau under the Individual Traveller Scheme (ITS).  Remained the key growth driver for Macau’s visitor arrivals, the number of Mainland visitors increased by 22.3% y-o-y.  The number of visitors from Hong Kong also saw a significant growth of 23.2% y-o-y.  As of end May 2019, the total supply of hotel rooms in Macau recorded at 38,000, out of which 24,600 were five-star hotel rooms. The cumulative occupancy rate of hotel rooms in Macau recorded at 92.0%, while the average length of stay of guests was at 1.4 nights.

The labour market in Macau remained broadly stable in 1H19.  According to the DSEC statistics, the unemployment rate maintained at around 1.7% while the overall median monthly income increased to MOP 17,000 as of the end of the first quarter.  The number of imported labour in Macau grew to 189,414 as of end May, up 0.5% from end 2018. The total resident deposit in Macau increased to MOP 654.84 billion as of end May 2019, up 3.1% from end 2018.

“Despite the fall of the gaming revenue in the VIP market in 1H19, the opening of the Hong Kong-Zhuhai-Macau Bridge brought about positive effects to Macau’s tourist industry and helped Macau’s economy remain stable.  However, the transaction volumes of various property sectors have declined significantly due to the weakening investment sentiment that caused by the global economic uncertainty amidst the ongoing US-China trade war.  We expect Macau’s property market to remain stable in 2H19,” says Mark Wong, Director of Valuation Advisory Services at JLL Macau.


The total residential sales transaction volume in Macau contracted significantly in 1H19 due to the US-China trade war that dampened investment sentiment.  According to the DSF statistics, a total of 3,920 residential sales transactions were registered in the first six months of 2019, a plunge of 42.2% y-o-y.

On the supply side, developers mostly adopted a wait-and-see approach in the first quarter of 2019 and only started to launch their projects in the second quarter.  During 1H19, a total of 575 presale transactions were recorded, accounting for about 14.7% of the total number of residential transactions.

In 1H19, the capital values of high-end and mass-to-medium residential properties fell by 3.5% and 1.8% respectively comparing with end 2018 due to the external economic uncertainty, while yields recorded at 1.6% and 1.7% respectively.

The leasing market was broadly stable in 1H19.  Though the number of imported labour rose a bit, the number of residential units available for lease during the same period also increased.  The rental values of high-end and mass-to-medium residential properties edged up by 0.3% and 0.2% respectively comparing with end 2018.

“The number of new residential units launched for sale has peaked in the recent two years amidst intensive competition among developers.  Due to the external economic uncertainty and the easing home purchase policy in Zhuhai, local developers are facing difficulties to adjust upwards the asking prices of their new projects and need to offer various incentives to boost sales,” comments Jeff Wong, Senior Director of Capital Markets at JLL Macau.


The office market in Macau grew steadily in 1H19.  A total of 2,856 new incorporations registered in Macau in the first five months of 2019, up 10.6% y-o-y.

In the past five years, there were only about 5,571 sqm GFA of new office supply entering the market.  With the continued inadequate supply of new office space, the overall office vacancy rate maintained at 7% in 1H19 while office rentals saw a moderate growth.  According to JLL Macau Office Index, the rental values for the overall office market grew by 3.1% comparing with end 2018 while Grade A office market remained stable in 1H19.

In the sales market, the number of office transactions fell by 54.4% y-o-y to only 77 in the first five months of 2019, as shown by the DSEC statistics.  The capital values for the overall office market and Grade A offices recorded no change comparing with end 2018.  The yields for the overall office market and Grade A office market grew a little to 2.8% and 3.1% respectively.

“With the extremely limited new office supply, the performance of office rentals and yields stood out from other property sectors.  As price levels of office properties have lowered when comparing with the highs in the past, it may potentially become investors’ preferred investment options once again,” says Oliver Tong, Head of Leasing at JLL Macau.


According to the DSEC statistics, the total retail sales fell by 1.9% y-o-y in the first quarter of 2019 to MOP 20.38 billion.  The fall was mainly due to the decrease in the sales of household appliances, motor vehicles and communication equipment.  During the same period, the total expenditure by tourists recorded a y-o-y growth of 5.2%.

In the sales market, a total of 195 retail property transactions were recorded in the first five months of 2019, down 41.6% y-o-y.  Notable sales transactions included the sale of two G/F shop units at Edf. Kam Yuen for approx. HK$300 million and a basket of G/F shops in the commercial podium of Edf. Jardim de Wa Bao for approx. HK$415 million.  The rental yields of both properties were about 3%.  According to JLL Macau Retail Index, the overall retail rental values remained stable in 1H19 when comparing with end 2018, while the overall retail capital values fell slightly by 0.4%.  The overall retail yields maintained at 1.8% as of June 2019.

“The US-China trade war coupled with the weakening of RMB has caused a negative impact to Macau’s retail sector.  The negative outlook of the retail leasing market has led to a fall in the volume of retail sales transactions.  The number of high street shops available for sale or lease in the core areas has been increasing.  Though retail capital values didn’t see a significant fall in 1H19, investors will expect a higher investment yield to offset the potential risks under the current economic uncertainty,” says Oliver Tong.


“According to the DSEC statistics, there was very limited new residential supply entering the market in 1H19; only 80 residential units were issued the occupation permit in the first five months of 2019.  As of the end of the first quarter of 2019, a total of 7,652 residential units were under construction; these units are expected to be absorbed by the market in the future three years.  The number of residential units in the design stage totalled 14,572 but it included the development schemes under the Ilha Verde Urbanisation Plan and Northern Taipa Urbanisation Plan.  For projects fall within these two planning zones they are unlikely to start construction in the short to medium term as there’s yet a detailed plan for the development of these two areas.  During the first five months of 2019, only 69 residential units were issued the construction permit.  Macau’s residential market is expected to face challenges in view of the very limited supply in the short, medium to long term,  The government should proactively find ways to increase land supply and speed up the process of urbanization to prevent Macau’s property market from facing the dilemma of discontinuity of supply” comments Gregory Ku, Managing Director at JLL Macau.

About JLL

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