A panel of experts presented historical portraits of urban Macau to shop how available land had been almost totally used for new casinos instead of housing citizens. The Asian Real Estate conference session on the impact of gaming on property in Macau did not sketch a rosy picture for the future of housing in the territory.

Local legislator and president of CAA City Planning and Engineering Consultants, Jose Sai-Peng Chui, presented diagrams showing how new land developments earmarked for urban development were switched to almost 100 per cent hotel and gaming use.

Examples of the land reclamation in the NAPE district, to the east of Macau peninsula, and the Cotai Strip between Taipa and Coloane, illustrated the dramatic change in intended land use.

“The original 1991 plan for NAPE was for a nice place for people to live, including schools, parks and places to work,” Mr Chui said. As it has been built, almost 100 per cent has gone to hotels and casinos.” This change was replicated in the Cotai Strip.

The turnaround came with the liberalisation of the gaming industry in 2001. Before the new casino licences being issued, the Macau economy was ‘dying’ with per-capita gross domestic product growth rates of 0.1 per cent. A bigger is better Las Vegas style gaming model was to be the new saviour.

Unfortunately Macau doesn’t have the luxury of expanses of desert waiting to be greened. With only 28.6 square kilometres of land to play with, development of resorts, casinos and mega-malls would always come at the expense of someone.

Plans were in place for homes to house more than 160,000 people in NAPE and the Cotai Strip. Local planners were looking to embrace the cutting edge urban development philosophy to locate people close to where they work, play and where their children could go to school.

The homes never came.
Mr Chui said the Cotai Strip would now house the largest casino, hotel and retail complexes in the world.

Government officials behind the decision to focus on developing a huge gaming industry in place of increasing residential space were focusing first on developing a healthy economy.
“You have to have bread to eat before you can do anything so it was important to concentrate on the economy,” Mr Chui said “The idea was to have the gaming industry as the head of the economy and the services sector as the body.”

High GDP growth
The idea seems to be working with gross domestic product (GDP) growth reaching unprecedented levels of more than 20 per cent

The head of the China research division of Jones Lang Lasalle Limited, Wee Liat Lee, told the conference: “Macau probably has the highest GDP growth rate in the entire world. I have never seen this growth before, as an economist.

However, those the economy is intended to serve, the people, are not overjoyed with progress so far

A Macau quality of life survey presented recently by the University of Macau showed the overall well being index is dropping with the majority of respondents not satisfied with the affordability of housing and government efforts to tackle it

Although the survey showed almost 70 per cent of respondents do not spend any income on housing, the dissatisfaction could be linked to the historical custom of buying and not renting. A staggering 89 per cent of respondents owned their homes, a trend unlikely to continue in the current market.

Streams of expats
The appearance of large casinos in Macau is attracting streams of expatriates who are driving up the local housing prices

The average transaction price of residential units per square metre in the first quarter of this year jumped by 27 per cent to MOP12,433, compared with the same quarter last year

With more than 100,000 immigrants expected in the next four years this trend will continue.
The pace of wage growth is will help locals keep up with the rising property prices, argued Mr Wee. Mr Wee calculated that of the 21,000 new homes planned for release in the next four years, the majority of three bedroom, or family sized apartments, will have a price tag of $HK2 to 3 million each.

A household will need an average income of $HK28,000 a month to afford the necessary mortgage “If you look at the income growth this will be affordable for most of the people so we don’t think there will be a problem with demand,” he said

This may be true for the 36,000 casino workers who brought in an average salary of MOP14,000 per month in the fourth quarter of last year. However the national average income is currently closer to MOP7,000, a huge gap for most.

Even if higher wages improve the affordability of housing for locals, the problem the government now faces is where the growing population can live.

Short supply
With an estimated population increase of 100,000 by 2009, land to house them is in short supply. Building up is the current solution suggests Mr Chui.

“The government is getting very creative,” he said.

“Land around Nan Van, with one high, 100-metre tower and a wonderful landscape is being converted to higher buildings.” he said.

A second area around the Guia Lighthouse has also seen height restrictions eased with an original limit of 90 metres for residential raised to 135 metres. This so called urban renewal, which basically raises and modernises buildings, had its downfalls he said.

“This creates other problems, it is visually changing the landscape.”
Turning water into land is one answer the panel agreed would solve the possible housing shortage. This is also the most complicated solution.

“This is not a 100 per cent solution,” Mr Chui said. “According to Macau basic law, Macau doesn’t own anything that is wet. This requires agreement from the mainland government.”
If all else fails locals could emigrate to Zhuhai he said.

Panel member Choi Kung Ung, vice-president of the association of property agents and realty developers and a local legislator, did suggest discussions with the mainland over possible use of nearby Heng Huin Island were progressing well but failed to give any details.
With the phrase “we have to find how gaming and the people of Macau can find a balance” Mr Chui closed his presentation. The chance of this balance being found any time soon was illustrated by his final slide of a couple exercising a seemingly almost impossible yoga move.

Thanks to Nigel Huxetable :: Macau Daily Times

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