Macau luxury properties could play catch-up with price rises elsewhere in the region in the New Year, driven by a confidence-boosting resumption of work on its Cotai mega-resort and a fresh influx of expatriate construction and casino staff.
"The top end of the property market in Macau has lagged the recovery in Hong Kong and could be in line for about 30 per cent growth in prices this year to an average of HK$9,000 per square foot from the current HK$7,000," said Ronald Cheung Yat-fai, the chief executive of Midland Realty (Macau).
"The economy here will certainly get a big boost if Las Vegas Sands resumes work on its resort development on the Cotai Strip, and the property market will benefit."
Cheung is referring to Sands China's widely expected resumption of construction work in the first half this year on its 6,000-room Cotai mega-resort across the street from its 3,000-room Venetian Macao. Sands China is the Hong Kong-listed arm of New York-listed parent Las Vegas Sands Corp.
In a move that hammered the group's New York share price and sentiment in Macau, work on the resort was suspended in November 2008 to help preserve cash and raise money for projects under way in Singapore and Pennsylvania.
To date, prices of top-end properties in the gambling enclave have not yet fully recovered from the blow. But estate agents say the resumption of work on the latest mega-resort in the gambling enclave, along with the start of construction last month on the Hong Kong-Zhuhai-Macau bridge - which will halve travelling time between Hong Kong and Macau to 30 minutes - will entice investors back into the market.
Signs of a revival are already evident, according to Cheung.
Units on upper floors of Macau's prestigious housing project, One Central Residences that offers sea views, are selling for HK$6,500 to HK$6,800 per sq ft, from a low of HK$3,700 in January last year after the added blow to confidence caused by the global financial crisis.
But compared with the average price of HK$20,000 per sq ft fetched by Hong Kong luxury flats, there remained ample room for further price gains, said Cheung.
He said luxury home prices in the enclave remained 30 per cent below their HK$10,000 per sq ft peak reached in 2007.
Patrick Wong, the chief executive of Tenacity Real Estate Group, which owns an office-retail project at 39 Avenida Alemida Riberio in the core business district of Macau, said: "Lots of banks are looking for office space for expansion and this is signalling that Macau's economy is improving."
Ma Iao Iao, the chairman of San Kin Wa Construction and Investment, a major developer in Macau, is also bullish about the market's prospect.
The firm plans to release the remaining units in its Bay View residential development, about 10 minutes' walk from the Macau ferry pier, for pre-sale early this year.
Ma believes Hong Kong buying interest will return to bet on the capital appreciation as the construction of the Hong Kong-Zhuhai-Macau bridge has started. The link will greatly improve Macau's accessibility when the bridge is completed by 2016.
He hopes the upcoming sale of Bay View, a medium-priced residential development due to be completed in June, will achieve a price of HK$3,000 per sq ft, about 7 per cent higher than current secondary market deals.
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