‘Last Call’

While many industries in Macau are still struggling to tackle the negative impact of COVID-19, the home property market has already seen signs of recovery with first-hand sales driving up the volume. 


While large-scale public gatherings have been almost extinct in recent days amid the continuing fight against the novel coronavirus (COVID-19), long queues could still be seen from time to time in the city with people rushing for face masks or daily necessities. A similar scene occurred in the Cotai district over a weekend in mid-April, however people were awaiting for show flat viewing and a chance for homeownership at a new high-end residential project being built in Cotai. 

“I’ve anticipated there would be quite some people but didn’t expect there would be that many people,” says Rachel Lei, one of the hundreds of people lining up for YOHO: Cotai Marina Bay. “There are not many things you could do nowadays for your leisure time with different ongoing travel restrictions and other measures [to combat the pandemic], so flat viewing is kind of my recreation activity now.” 

An office worker in her late twenties, Ms. Lei also has plans to buy her first house amid the current market fundamentals. “I think — my family relatives and friends have also told me — it’s high time to find the best bargain in the [residential] market now, given the recent price correction and the easing signs of COVID-19,” she adds. 

Her viewpoint has indeed been shared by quite a few in the gambling enclave with a hefty rebound in the number of flat viewings and home transactions — both first-hand and second-hand — since end-March. As many other industries in Macau are still battling the negative economic impact of the global pandemic, the real estate market has seemingly seen its worst days. 

‘Low threshold’ 

YOHO: Cotai Marina Bay, opposite to the integrated gaming resort Galaxy Macau, is among some local luxury housing projects that have carried out new rounds of sales or pre-sales in recent weeks. Situated in part of the 64,500-plus-square-metre land area that boasts shops, housing, offices, hotel, and serviced apartments, YOHO: Cotai Marina Bay comprises two residential towers, offering a total of 388 units, from studio flats to three-bedroom homes in the saleable area of between over 320 square feet and nearly 800 square feet. 

Developed by YOHO Group, which is also behind residential development YOHO Twins on Small Taipa Hill and The Macau Roosevelt, a hotel situated in the Macau Jockey Club, the project is expected to be completed by end of this year and has launched pre-sales since last year. According to figures from the Financial Services Bureau, a total of 230 flats in YOHO: Cotai Marina Bay have been sold from last year until the first quarter of 2020 at an average price of over MOP187,000 a square metre, almost doubling from the average home price of MOP96,900 a square metre in Macau in the January-March period this year. 

And the developer undertook a new round of pre-sales in mid-April, attracting over 1,000 buyers visiting the show flats. Sources in the market say nearly 100 units have been put up on pre-sales in the recent round. “The flats have been highly sought after by buyers,” says Lily Hong, sales director of Midland Realty (Macau) Ltd. “In the past only the sales of some 100 to 200 flats and more were considered to be good results but now the transactions of some 70 and 80 flats in one go are stellar.” 

Despite an asking price of about HK$12,000-HK$13,000 a square foot (MOP133,041-MOP144,129 a square metre) this time, which is still higher than the city’s average home price, Ms. Hong noted YOHO: Cotai Marina Bay was popular among buyers — most were end-users — because of its prime location. “Given its proximity to the mega Cotai resorts, the buyers can lease the flats or resell the flats easily in the future should they have decided to live elsewhere,” she notes. 

“The price tag for the smallest type of flat in [YOHO: Cotai Marina Bay] is just about HK$4.5 million, which is a low entry threshold for new high-end projects,” she adds. In addition, each flat is equipped with electrical appliances and furniture worth HK$500,000, while the developer allows buyers to pay only 10 percent of the value of the transaction for down payment until an occupation permit has been issued. 

Various incentives 

Besides YOHO: Cotai Marina Bay, pre-sales and sales have also been available in several other new luxury projects since end-March that have met with warm reception. These include Praia Park, a project of about 1,850 flats in 12 towers in Seac Pai Van; Avenida, which comprises over 330 flats in the NAPE district; Pride Oceania that consists of nearly 500 flats at Rua dos Pescadores in Areia Preta; and The Grand Residencia Macau, a residential tower of 266 homes in The Residencia Macau that has been completed since 2010 in Areia Preta. 

Albeit a small quantity of new flats are available in the newest round than YOHO: Cotai Marina Bay, Ms. Hong notes these projects have also been doing “well” in terms of sales because developers have also offered various incentives for buyers, equivalent to a price discount of 5-10 percent in general. For instance, the last batch of about 20 flats in The Grand Residencia Macau — developed by veteran contractor San You Development Company Ltd, which is also behind Avenida, and residential projects here like The Manhattan and Kingsville in Taipa — has only fetched about HK$8,500-10,000 a square foot, factoring in incentives like a stamp duty rebate and the two-year exemption of property management fees. This represents a 20-percent cut from the asking price in the previous round. 

“It also helps that COVID-19 has started to ease in Mainland China and Macau in recent weeks, driving up the home sales [in April], which is still lower than the monthly average of about 600-800 transactions before the pandemic though,” says Ms. Hong. She expects the monthly residential transactions in the second quarter will rebound to an average of 400-600, due to the surging the first-hand sales, adding the average home price in April is also expected to snap a losing trend of four consecutive months over the sales of YOHO: Cotai Marina Bay and other luxury projects. 

Bottom out 

Latest government figures show the number of residential transactions in the first quarter of 2020 totalled 1,016, or less than 340 a month, down by 21.7 percent from the previous year and by 39.2 percent quarter-to-quarter, amid  COVID-19. The home price averaged MOP96,900 in the January-March period, declining 8.8 percent quarter-to-quarter and 7.3 percent year-on-year. 

Roy Ho Siu Hang, director of another real estate agency, Centaline Macau, acknowledges the home property market has bottomed out, expecting the home sales would continue to recover in the coming months, in particular first-hand and second-hand flats in Taipa. “The housing demand has been suppressed for some time and started to come back with the moderation of COVID-19,” he says. “Potential buyers are also in hopes of looking for the best bargain amid the pandemic.” 

While the second-hand homes have seen a price correction of 5-10 percent at the onset of the virus outbreak, this might not be the case anymore. “We’ve felt like the owners have been less willing to slash their asking price in recent times,” Mr. Ho notes. “The home price is stabilising.” 

Healthy development 

Or, in the words of Jane Liu Zee Ka, managing director of Ricacorp (Macau) Properties, it’s “the last chance” for any potential buyers to buy the dip. “There are surely a few homeowners in the market who are in need of money in this economic climate and willing to sell at a lower price,” she says. “But the overall trend we’ve recently observed is the room for price negotiation between the buy side and sell side is getting smaller and smaller.” 

The city’s gaming-and tourism-reliant economy is still marked by uncertainties — it is still not known when the travel restrictions for Mainland Chinese, the city’s largest source of travellers, and other international travellers to Macau will be lifted — with the International Monetary Fund (IMF) forecasting the gross domestic product (GDP) in Macau would decline 29.6 percent this year. But Ms. Liu also noted the real estate market has stabilised first. 

“From Macao to the mainland to other countries in the world, the authorities have rolled out numerous economic stimulus measures, not to mention the interest rate has been kept at an extremely low level,” she reasoned, adding Chief Executive Ho Iat Seng has also advocated for the economic recovery and healthy development of real estate market in his maiden Policy Address. “It’s safe to say the real estate market has already seen its worst days in this pandemic,” she notes. 

In addressing the enquiries from legislators about the home development policy in late April, Mr. Ho told the Legislative Assembly that the government would not develop public homes “in an unlimited scale” in consideration of the home price in the private market. “There are about 70 percent of people with homeownership in Macau,” he said. “The government doesn’t want to drive them into the negative equity territory… which is not fair for them.” 

While Rachel Lei has not bought a unit at YOHO: Cotai Marina Bay, her hunt for her dream house continues. “I have viewed more than 10 flats in the past few weeks… including first-hand flats in Praia Park and Pride Oceania,” she notes. “I’m still mulling all possibilities and I don’t want to rush myself in making this lifelong decision.”