Returning foreign workers boosted Macau residential rents last year but overall market still stressed, JLL says
- Rents of luxury flats grew by 16.3 per cent compared with 2022, while those of mass residential units surged by 19.4 per cent, JLL says
- The government should consider lifting the cooling measures entirely to salvage the fragile real estate market: JLL executive
Rents of luxury flats grew by 16.3 per cent compared with 2022, while those of mass residential units surged by 19.4 per cent, JLL said on Wednesday citing its Macau Property Index.
“In 2023, the employment situation in Macau saw improvements as the labour market quickly filled with foreign workers,” JLL said, adding that the return of expatriate employees drove the performance of the residential leasing market.
The number of foreign workers in Macau had risen by about 14 per cent to nearly 177,000 as of the end of December, a year-on-year increase of around 22,000, according to Macau Statistics and Census Service data.
The overall property market, however, remains under pressure, especially when it comes to sales of new residential properties, JLL said.
Data from Macau’s Financial Services Bureau shows transaction volume in the residential market declined 1.3 per cent year on year to 2,913 in 2023, with only 71 presale transactions recorded. Presale transactions accounted for only 4.3 per cent of the total residential deals.
Sluggish home sales could be attributed to policies such as the cancellation of the mortgage scheme for first-time young homebuyers, rising interest rates and a declining stock market that have led to a reduction in local residents’ wealth, said Oliver Tong, general manager at JLL in Macau and Zhuhai.
According to Macau’s Data Statistics and Census Service, visitor arrivals last year reached around 28 million, a year-on-year increase of nearly 400 per cent.
The strong recovery in the tourism industry provided “significant support for rental prices of commercial properties and residential units in the vicinity”, said Mark Wong, director of value and risk advisory at JLL in Macau.
“However, investment sentiment remains subdued in a high-interest environment, as investors adopted a cautious stance towards property investments,” Wong said. “Consequently, the market has witnessed an increase in the number of distressed assets available for sale, exerting downward pressure on property values.
“Given the volatile external environment, the property market’s trajectory [in 2024] is expected to resemble that of the previous year.”