The Macau SAR government announced the betting duty for 2015/1H was MOP 45.7 billion, down 35.6% y-o-y, dropping for 12 consecutive months. Since gambling revenue has been shrinking, the government started easing travel restrictions on mainlanders. On the other hand, the recent opening of Galaxy II and Broadway in May, and upcoming Studio City Macau hopefully will freshen up the gambling industry and slow the economic downturn.
As the region’s economy is not as good as expected, flat owners lower their asking prices, resulting in active transactions in the first half of 2015. The Financial Services Bureau recorded 617 residential transactions in May, down 4.6% compared to April, but doubled the figure in early 2015. Total transaction amount was MOP 3.5 billion for 2015/1H, with Macau Peninsula, Taipa and Coloane outperforming others.
For new residential projects, developers offer flexible payment methods and various discounts to lure buyers back to the market. But none of the new projects have met the requirements under the new pre-sale rules, leading to a lack of supply on the market. The current new flats are just the unsold units of completed projects, which are getting popular in times of inadequate new supply. Property prices average at MOP 8,320 psf, down 20% from the highest MOP 10,360 psf in 2014/2Q. It could be the right time for home purchase. We expect there will be only a mild adjustment in the market and it may pick up in 2015/2H.