What Does 2012 Hold For Macau Property ? Is the coming year going to be any different from the past ?

Juliet Risdon is a Director of JML Property and a property investor. 
Having established the company in 1994, JML Property offers Investment Property & Homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.

We don’t have a crystal ball, but one thing is for certain; 2012 promises to be an interesting year for Macau.

The Positive Outlook

Macau’s gaming sector is likely to continue to go from strength to strength.
The new resort and hotel projects are due to open on the Cotai Strip in the 2nd Qtr, and the increased supply of Hotel rooms should have a positive impact on Macau in two very important ways;
Firstly, a huge step towards supplying the critical mass of hotel rooms required on the strip in order to kickstart the regional conventions and exhibitions business.
Secondly, the creation of approximately 10,000 more service industry positions, requiring further import of foreign labour and expertise from outside Macau.
Furthermore, its barely a secret that up to three of the gaming license holders plan to launch new projects on the Cotai Strip.
These factors should have a positive effect on property prices. Based on the positive outlook, demand for rental property should rise.
There will be a higher quality of visitor to Macau thanks to the conventions, and the extra revenues will help small business in Macau.
As the Macau economy strengthens, property prices should see a steady increase, especially as there is less speculative investment and more purchase of property as a home and long term investment.
So what could go wrong ?

Hurdles to overcome

Most of us have heard the phrase ‘the world is flat’, coined by economist Thomas Friedman as the title of his popular book, describing how the economy in the information age crosses borders and physical barriers thanks to the internet.
It seems that the modern world is not only flat, but a lot smaller than it used to be. Events in Europe and the USA now have an almost instantaneous effect on Asia, and we no longer live in splendid isolation. The Eurozone crisis will undoubtedly affect Asia, and of course Macau.
Internally, Macau has some major issues to resolve.
City ‘planning’ it seems, is not important in Macau. It’s the only conclusion possible when we consider the genius of projects such as the public housing development at the end of the Cotai Strip on Coloane. 30,000 people from ‘low income’ families placed at the furthest end of Macau.
Anyone driving past the bus stops on Coloane between 5pm and 6pm will already have witnessed a sign of the chaos to come, unless the issues with public transportation are addressed immediately.
Macau also has to face up to its labour issue. Unless the Macau government admit that there is a problem and start to address it in 2012, it may have disastrous consequences.
The short-sighted protectionism that exists today is having a huge detrimental effect on Macau. Employers cannot find or keep staff, hotels and restaurants are manned by overpaid, undertrained and unsuitable people.
Visitors to Macau, the very people that Macau relies on, stay one night and do not return. Why? They are greeted by rude taxi drivers, or badly trained hotel bus drivers. They receive bad, slow service in restaurants, they have poor experiences checking in to undermanned hotels, and they constantly encounter employees who couldn’t care less about the job they are in because they know they can walk into another higher paying position the moment they get bored.
Many business owners that we know have given up on Macau. They are either outsourcing work to other countries that are much cheaper, quicker and far more efficient, or they are leaving Macau altogether.
None of these factors are good for property prices.
So … what’s in store for 2012 ?
With these factors pulling in opposite directions, its difficult to predict which force will be stronger.
2012 promises to be an interesting year for Macau.