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MACAU BUSINESS


“Although the visitation fi gure to the city could still maintain in the positive territory, leveraged on the opening of the Hong Kong-Zhuhai-Macau Bridge [since October last year], the mainlanders have spent less,” said Mr. Tong. Latest offi cial fi gures show the visitors’ arrivals to Macau inked


up nearly 1.8 per cent in October, the slowest growth since January 2018, underscoring the spill-over impact from the adjacent SAR. In the fi rst 10 months of 2019, the visitation fi gure maintained a robust hike of 15.3 per cent to over 33.41 million. The travellers, however, have so far spent less. The total non-gaming expenditures of visitors declined 17.2 per cent year-on-year to MOP15.2 billion in the third quarter of 2019, extending the losing streak into three consecutive quarters, according to government fi gures, while the per-capita spending of mainlanders in Macau also plunged 26.7 per cent in the July-September period.


Technical recession


But Mr. Tong sees a silver lining in these sets of gloomy economic data. “The local expenditure was still able to remain positive in the third quarter… underlying a stable domestic demand,” the scholar said.


“The local unemployment rate has also maintained at a low


level, between 1.8 per cent and 2 per cent, showing the resilience of the economy,” he said. “The government has also announced there will be a salary hike for civil servants next year, and gaming operators and other [employers] will likely follow … so the community does not need to be too downbeat about the future.” While the Macau economy has entered into a technical


recession — with the GDP falling for at least two consecutive quarters — the government announced in November the salary index of all the civil servants will increase about 3 per cent from the current scale of MOP88 per point to MOP91, while residents will continue to enjoy a cash handout next year — MOP10,000 for permanent residents and MOP6,000 for non-permanent residents. “The negative trajectory is very likely to continue in the fourth


quarter with the sluggish performance in exports of services and capital investment, but I’m cautiously optimistic about the prospect of the fi rst quarter of next year,” Mr. Tong added.


Mixed forecasts


Concerning the city’s economic outlook, international organisations have mixed forecasts. Moody’s estimated Macau’s GDP would contract 2 per cent this year because of the slowing mainland Chinese economy (its GDP expanded at the slowest pace in 27 years, at 6 per cent in the July-September period) have negatively impacted Macau’s visitation figure, gaming revenue and exports of services overall. But the global rating agency expects Macau will bottom out in 2020, with annual growth of 3 per cent. But others are more pessimistic. The International


Monetary Fund (IMF) expects the city’s GDP would fall 1.3 per cent and 1.1 per cent respectively in 2019 and 2020, owing to the slowing mainland economy as well as the expected lacklustre performance in private investment over the uncertainties clouding the renewal process of gaming licenses. The city’s six gaming concessions and sub-concessions will expire by 2022,


Downward pressure but limited


The downward pressure in the economy might leave a dent in local home prices, but there’s not much room for downward adjustment over the lack of supply, observers say.


Highly subjective to the economic volatility, the local


property market has still managed to remain in an upward trajectory so far this year. According to the latest fi gures from the Statistics and Census Service, the average home prices here amounted to MOP109,977 a square metre in the third quarter of 2019, up by 5.9 per cent from a year earlier and by 2 per cent from the end of last year.


The number of home transactions totalled 6,446 in


the fi rst nine months of 2019, plunging by nearly 28.9 per cent year-on-year, the data said. “We expect the housing market of Macau will likely continue to slow down in the coming months,” said Tommy Xie, an economist at Oversea-Chinese Banking


24 JANUARY 2020


Corporation Limited (OCBC Bank). “The housing prices… may drop by 1.5 per cent year-on-year by end of this year.” “In the longer term, the housing market correction might be


limited due to housing supply shortage,” the OCBC economist added.


The city’s average home price has increased for two consecutive years – 7.5 per cent in 2018 and 16.8 per cent in 2017 – in the wake of declines in the 2015-16 period, when Macau was plagued with gaming woes over the slowing economy and the anti-corruption campaign in mainland China. “The performance of the local housing market has been lacklustre this year, given the slowing economy, the trade war between China and the United States, and other factors,” said Lok Wai Tak, president of the Macau Real Estate Development Association. “If there’s still no improvement in these factors in the


future, I won’t be surprised the home price will stay put or even go down 5 per cent next year,” he added.


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