Macau market: the collapse
As we well know, the situation which devastates the various nations both psychologically and economically has no equal. Indeed, it is not possible to say that one country is more or less affected by another. The criticality is counted on the number of deaths, infections, and by now exhausted health personnel. The real estate sector, of course, is also strongly affected by this crisis. And one of the areas that is suffering greatly from this absurd historical phase is that of Macau.
To fully understand the size of the kickback immediately, we will try to carry out a detailed analysis: pre and post Covid-19.
We assume that the Macau real estate market was in difficulty, compared to the national average, even before the Coronavirus.
To affirm this, we analyzed the situation in 2019. In this period, the average transaction price (for residential units) had fallen by 3%, in stark contrast to the increase of the previous year (+ 5%). But what happened before this collapse?
The Macao real estate market was however supported by numerous interventions, also of an infrastructural nature, which guaranteed an increase in the value of the same structures (residential and non-residential) present in the territory.
These include:
- the construction of the Gongbei tunnel, the only link between Zhuhai and the Hong Kong-Zhuhai-Macau bridge
- The Shenzhen-Zhongshan tunnel, which will reduce the average travel time between Shenzhen and Zhongshan from two hours to less than 30 minutes.
- The Guangdong-Hong Kong-Macau Bay Area project to increase connectivity, trade and investment between the three regions.
Important investments, which however, do not seem to be enough to revive the Macao market.
Indeed, as of January 2020, the Macau real estate market has weakened considerably.
The motivation must be sought in the feeling of uncertainty of investors and especially of the developers. In fact, they reserve the right to act to avoid further damage of an economic nature. There is also political tension. The climate between the USA and China is not among the most relaxed. And with the epidemic going on, everything seems less than improving.
The demand is dropping. But let's see in detail how real estate transactions in Macau behave. The numbers speak clearly. Despite not having data on the yields for lease contracts, for the residential sales sector, there is talk of 23% less volumes. In addition, the value of the transactions themselves fell to 26%. A real devaluation, which seems to considerably worry the entire Macau real estate market.
Lastly, let's not forget that Macau's economy suffers precisely in the driving sectors: tourism and gambling. In fact, in February, the government imposed a lockdown on all the casinos in the area, leading to a loss of over $ 900 million.
What can we say, it is hoped that the situation will recover, and that this wonderful area will return to its former glory!
To fully understand the size of the kickback immediately, we will try to carry out a detailed analysis: pre and post Covid-19.
We assume that the Macau real estate market was in difficulty, compared to the national average, even before the Coronavirus.
To affirm this, we analyzed the situation in 2019. In this period, the average transaction price (for residential units) had fallen by 3%, in stark contrast to the increase of the previous year (+ 5%). But what happened before this collapse?
The Macao real estate market was however supported by numerous interventions, also of an infrastructural nature, which guaranteed an increase in the value of the same structures (residential and non-residential) present in the territory.
These include:
- the construction of the Gongbei tunnel, the only link between Zhuhai and the Hong Kong-Zhuhai-Macau bridge
- The Shenzhen-Zhongshan tunnel, which will reduce the average travel time between Shenzhen and Zhongshan from two hours to less than 30 minutes.
- The Guangdong-Hong Kong-Macau Bay Area project to increase connectivity, trade and investment between the three regions.
Important investments, which however, do not seem to be enough to revive the Macao market.
Indeed, as of January 2020, the Macau real estate market has weakened considerably.
The motivation must be sought in the feeling of uncertainty of investors and especially of the developers. In fact, they reserve the right to act to avoid further damage of an economic nature. There is also political tension. The climate between the USA and China is not among the most relaxed. And with the epidemic going on, everything seems less than improving.
The demand is dropping. But let's see in detail how real estate transactions in Macau behave. The numbers speak clearly. Despite not having data on the yields for lease contracts, for the residential sales sector, there is talk of 23% less volumes. In addition, the value of the transactions themselves fell to 26%. A real devaluation, which seems to considerably worry the entire Macau real estate market.
Lastly, let's not forget that Macau's economy suffers precisely in the driving sectors: tourism and gambling. In fact, in February, the government imposed a lockdown on all the casinos in the area, leading to a loss of over $ 900 million.
What can we say, it is hoped that the situation will recover, and that this wonderful area will return to its former glory!
