Declining sales prices and weaker transactions seen in the city’s homes have already extended to shops and industrial units for the first half of this year, a trend that is likely to continue in the remaining half, estate agency Ricacorp (Macau) Properties Ltd. remarked in a review briefing yesterday.
Dragged down by Macau’s continuous gaming slump and weaker luxury spending by visitors, the city will see transaction prices and shop rentals in prime districts continue to fall in the second half of 2015, the chief associate director of Ricacorp’s Macau unit, Franky Fong, said.
“Now, even when some owners of shops located to the west of ZAPE district [on the Macau Peninsula] that have offered them for sale at HK$200,000 (US$25,800 or MOP206,000) per square foot, no-one was willing to buy the shop space,” Mr. Fong said. “That price level is of a shop space spanning around 1,000 square feet, and is already a drop from the peak at some HK$260,000 last year.”
“Some owners have also been less aggressive when negotiating new lease contracts with clients, offering a rental level of some 20 per cent less than last year,” the estate agent said with regard to the rental status of prime districts here in the first half of the year.
According to Ricacorp Macau, as of last month, the average transaction price of a shop located in the prime district of ZAPE had already fallen 27 per cent to about HK$196,000 per square foot from the peak of HK$270,000 per square foot last year; meanwhile, the average rental of a shop in the district stands at HK$330 per square foot, a fall of 20 to 30 per cent when compared to last year’s peak.
“The shop transaction cost and rent will definitely be down-adjusted in the second half of this year for the prime tourism districts,” Mr. Fong said. “But at the same time, we see more commercial interest in setting up new businesses in residential neighbourhoods, where the rental level has actually risen.”
Industrial units are another property segment that registered a fall in sale price and rental for the first half of this year, following weak sales sentiment in the general property market, according to Ricacorp Macau.
As at last month, the average sale price of an industrial unit in Macau stood at HK$4,000 per square foot, representing a fall of some 20 per cent when compared to the highest level of HK$5,000 per square foot last year.
The rental cost of a renovated industrial unit has also dropped by around 13 per cent to 15 per cent to HK$13 to HK$15 per square foot when compared to last year’s peak.
No new supply
Macau has seen the worst half-year performance in terms of home sales this year since 2003, as no new home supply was available in the market and sales of second-hand homes have weakened, the estate agency said.
Ricacorp Macau estimates that the city would register only around 2,900 home transactions for the first half of this year, representing a fall of nearly 35 per cent when compared to the 4,442 transactions in the same period last year.
As of the first half of this year, the city has closed only 60 or so cases of off-plan home sales, regional director of Ricacorp Macau Jennifer Un said. These 60 cases are Shun Tak Holdings Ltd.’s Nova Park, the only available first-hand units in the home market as most other developers have showed no willingness to put forward a new round of sales given the weaker market sentiment and lack of developable land reserves, Ms. Un maintains.
While not putting forward any sales price forecast for the second half of this year, the estate agency anticipates that the home market condition by then will be similar to the first half.
