MACAU, April 7 (Reuters) - As the world’s gambling capital Macau races to open more than 17,000 new hotel rooms over the next three years to keep pace with a flood of Chinese visitors, only about 4,000 affordable homes for locals are expected to be built in the same period.
With an average apartment costing more than $500,000, the Chinese special administrative region has emerged as one of the world’s costliest places to buy property, outranking neighbouring Hong Kong, where prices are already among the most expensive in the world.
Prices in Macau are forecast to rise 10-20 percent this year and the situation looks set to worsen as Macau’s new crop of mega resorts open.
For residents like taxi driver Dengbao Xian, soaring property prices mean the chance of owning a home in the former Portuguese colony looks impossible.
“Buying a flat? Not a chance, even if you work for your entire life,” the 50 year-old lamented as he drove past the glitzy front of MGM’s metallic hued casino tower.
Population growth in the tiny territory, one-third the size of Manhattan, is expected to jump 20 percent to 700,000 by 2016 according to government estimates.
“Four years ago you could buy a flat with 1 million patacas ($125,100). Now you can’t even buy a parking space,” said Cherrie Choi, a sales director at realtor Centaline Property.
Some residents are choosing to buy in Hong Kong where investment returns are twice that of Macau. Others are buying in neighbouring Chinese provinces and some, like many retirees, are giving up on the city and moving as far away as Thailand.
In March more than 400,000 people competed for 1,900 affordable housing units with locals lining up outside Macau’s public housing bureau at 4 a.m., local media reported.
“It’s really the biggest problem in Macau. Right now the rents and prices of flats have shot up way beyond people’s financial capabilities,” said lawmaker Jose Coutinho, who accuses the government of not doing enough to reverse the situation due to its ties with tycoon developers.
Property prices have more than tripled since 2009, according to data from the Macau government. The rise is in tandem with Macau’s gaming revenues, which last year totalled $45 billion, nearly three times greater than Las Vegas, Australia and Singapore combined.
Macau’s economy relies on the gaming industry with gaming taxes accounting for more than 80 percent of government revenues.
With unemployment at 1.7 percent, an estimated 40,000 new workers will be required as new properties open over the next three years, increasing demand for housing and exacerbating tension among protectionist labour unions worried about job security.
Macau laws dictate only locals can work as dealers, and the government is under pressure from residents who regularly take to the streets to ensure these restrictions remain.
Analysts estimate new casinos opening in 2015-2017 will require 12,600 new dealers, yet only about 700 are available per year.
A lack of a long-term plan for affordable housing is widening inequality say lawmakers and property consultants, to such a degree that even well-paid foreign executives in the casino industry are finding Macau prohibitively expensive.
“I have great empathy for the local Macau residents,” said Linda Switzer, vice president of retail at MGM Macau, who explained her monthly rent has jumped from a low of 8,000 patacas ($1,000) to 33,000 patacas in the seven years she has lived in Macau.
Macau’s government said it will continue to “be mindful” of outside economic changes impacting the local property market and deploy timely measures like increasing land supply and launching public housing depending on the situation.
Two of Macau’s largest property developers, Shun Tak Holdings and Polytec Asset Holdings, declined to comment for the story.
For now, new housing developments are limited to the luxury segment with projects such as the Fountainside, featuring 3,000 square-foot villas and landscaped gardens, which are springing up across Macau’s crammed peninsula to cater to wealthy buyers looking for a convenient place to park their gambling winnings.
With the majority of properties lying idle once purchased and a lack of affordable housing projects in the pipeline, locals are feeling increasingly marginalized.
“One of the sayings in Macau is that since I can’t afford to buy a house, I might as well buy a car,” said Macau-based political analyst Larry So.
$1 = 7.9910 Macau patacas Editing by Matt Driskill