Special Report – Housing, the poor relation

The average price per square meter of housing in the MSAR soared from MOP6,428.10 in 1999 to MOP107,522.00 in 2019 – a near 17-fold increase in 20 years

Macau Business | September 2022 | Special Report | Housing: A place to call home


“There was a remarkable decline in the house price index [HPI] after the Handover: from 100 in 1999 [i.e. the start date] to -385.87 in 2019,” according to the comprehensive Study on the Construction of an Indicator System to Evaluate the Population’s Living Standards and a post-Handover Living Standards Index for the MSAR Population (title adapted from the original text, consulted in Portuguese).

According to the study’s author, Lin Deqin (City University of Macau), “this means there is still a lot of room for improvement” in the area of housing.

Professor Deqin used four indicators to evaluate housing standards: residential area per capita, the average price per square meter of transacted housing units, the ratio of that average transacted price to median monthly income, and the number of social housing units per thousand inhabitants.

His data shows the average price per square meter of housing units traded in the MSAR in the year 1999 was just MOP6,428.10, a metric that then increased by a factor of 16.73 in the 20 years to 2019, when it reached MOP107,522.00.

Though the median monthly income of the employed population had risen to MOP16,825 (MOP20,000 for employed residents) in 2019 – a 242 per cent increase over 1999 – the average transacted price was still 6.39 times higher than the median monthly income of the employed population that year, “highlighting just how rapidly the price of housing units increased,” Mr Deqin explained, “and how the pressure felt by residents and their difficulties in acquiring housing has steadily worsened in recent years.”

The City University researcher attributed the spike in Macau’s housing prices through 2013/14 to the “prosperity of the gambling sector”. This meant that the “house price index for those years decreased significantly compared to 1999.”

In fact, the HPI for 2013 was -293.61, “leading to a decrease in the overall living standards index for the population of Macau to 99.43, a regression below even the base level of 1999.”

Ting Lan of the Institute of Accounting and Finance at the Beijing Institute of Technology, Zhuhai, also focuses on the impact of the gaming industry’s development: “Since the return of Macau and the opening of gambling rights, a large amount of foreign capital poured into Macau, which led to the continuous rise of housing prices in Macau, leading to the rise of prices and the increase of people’s living costs.”

Professor Lan believes the Macau SAR government “should continue to encourage and support the development of the real estate industry, perfect the relevant management system for the industry, guide the development of the real estate industry’s diversification, foster the development of new industrial chains, reduce the risk of real estate enterprise capital chain break up, and promote the sustainable and healthy development of the real estate industry in Macau.”

More radical is the view shared by several researchers from the University of Macau’s Faculty of Business Administration in their paper Inequality hikes, saving surges and housing bubbles (2017).

According to authors Qingbin Zhao, Guoqiang Li, Xinhua Gu and Chun Kwok Lei, “Unlike Hong Kong, Macau remains hospitable, not hostile, toward its tourist customers, and its casino tourism has functioned well as the world’s largest gaming industry in revenue terms since 2006. However, this does not imply that there is no social discontent with tourism in Macau. What should be noted is that such discontent does not lie in community annoyances caused by massive visitations, but in housing unaffordability and income inequality heightened by growing tourism.

“Wage growth was less than one quarter of GDP growth in the last decade, while average income growth was less than one third of housing price hikes,” the four researchers noted.

“A combination of rising inequality and housing bubbles in Macau (more serious than in Hong Kong) has become the breeding ground for social unrest against real estate developers and the local government,” the team conclude, believing those problems, “if not mitigated, may alter local inhabitants’ attitudes toward tourism and impact adversely on the local industry’s potential for further expansion.”

“A combination of rising inequality and housing bubbles in Macau (more serious than in Hong Kong) has become the breeding ground for social unrest against real estate developers and the local government” – study


The first decade

There is consensus among various scientists who have studied Macau’s housing market regarding the divestment that occurred in the first of the MSAR’s two full decades.

In 2015, researcher Marianne Ullmann presented a master’s thesis titled Residensity – Readings on Living in Macau.

In it she contends there was “a marginalization of all types of social programmes, housing foremost among them with its increasingly peripheral location in the city. Given the scarcity of territorial area, this condition is clearly felt.”

The architect, now based in Lisbon, goes on: “While it is clearly difficult to set aside areas to earmark for housing and other social programs to alleviate problems such as real estate pressure, the vastness of the area available for the construction of the massive tourist complexes of casinos and hotels always seems to be guaranteed. These come to clearly dominate the image of the city, smothering everything that does not concern them.”

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