Macau Home Prices May Climb as Much as 20% as Casino Growth Fuels Demand
By Kelvin Wong - Feb 23, 2011
Macau home prices, which have recovered to pre-global credit crisis levels, may rise as much as 20 percent this year as the city’s economy benefits from an expanding casino industry.
Residential values in the world’s biggest gambling hub will gain 20 percent in 2011, according to Midland Holdings Ltd., Hong Kong’s largest publicly traded real estate agency. Jones Lang LaSalle Inc., the world’s second-biggest commercial property broker, predicts a 10 percent gain, while London-based Savills Plc forecasts a 15 percent jump.
Low interest rates, a lack of new supply and rising personal incomes driven by a 58 percent surge in casino revenue helped real estate prices in the former Portuguese colony in southern China climb 15 percent in 2010 even as the government introduced measures to stamp out speculation.
“The property market is now being supported by locals whose incomes have risen off the casino boom, and also the huge demand for rental from foreign workers coming in for the new casinos and other infrastructure projects,” said Gregory Ku, managing director for Macau at Jones Lang.
Casino revenue in Macau may climb 30 percent to $30 billion this year as visitors from mainland China increase, CLSA Ltd. said in a report last month. China contributed more than half the number of Macau’s 25 million tourist arrivals last year.
Macau’s casino revenue grew to more than four times that of the Las Vegas Strip after the government allowed the entry of overseas operators in 2002, including Las Vegas Sands Corp., the world’s biggest casino company by market value, and Wynn Resort Ltd., ending billionaire Stanley Ho’s four-decade monopoly.
Prices for some luxury projects, such as the One Central Macau Residences co-developed by Ho’s Shun Tak Holdings Ltd. and Hongkong Land Holdings Ltd., have risen to about 6,000 patacas ($748) to 7,000 patacas a square foot at the end of last year from about 4,000 patacas in early 2009, according to Jones Lang.
About 10 percent of those who bought the properties last year were foreign investors, compared with about 35 percent between 2007 and 2008, said Ku.
“The credit crisis has pretty much driven out all the foreign funds looking to make a quick profit,” he said.
Galaxy Entertainment Group Ltd., the casino operator part- owned by Permira Advisers LLP, plans to hire as many as 8,000 workers this year after the opening of its 600-table casino in Macau’s Cotai district, Chief Financial Officer Robert Drake said Feb. 15. Macau, the only region in China where casinos are legal, has a population of 550,000.
The city’s government is building a light-rail system aimed to be finished in 2014 and is working with neighboring Hong Kong and Zhuhai to build a bridge connecting the three cities.
“People are earning more and that’s creating a huge demand to upgrade to better properties,” said Franco Liu, managing director for Savills’s Macau unit. “With limited new land supply in the next few years, there’s so much pressure on prices to keep going up.”
Prices of some luxury apartments have risen as much as 80 percent from the trough during the credit crisis, prompting the government last year to impose higher property transaction taxes and raise mortgage down payments for transactions larger than 3.3 million patacas.
That may lead luxury prices to lag “slightly behind” those in the mass market this year, said Savills’s Liu.
“The measures may push some buyers to shift to lower value properties because they can get a higher mortgage and fall into a lower tax brackets,” he said.
With no standard definition for Macau luxury prices, property agencies normally distinguish them from those in the broader market based on location and prices, said Stanley Poon, managing director for Macau at Centaline Property Agency Ltd., Hong Kong’s biggest closely held realtor. Centaline forecasts Macau home prices to rise 15 percent in 2011.
Macau’s luxury home prices fell as much as 40 percent in early 2009 from a previous height in 2007, according to Centaline, after several foreign funds sold investments and developers halted projects as liquidity dried up during the credit crisis.
The number of property transactions fell to 17,000 in 2009, a seven-year low, before rebounding to 30,000 last year, according to data from the Macau government.
Macau’s economy may rise 26 percent in 2010 from a year earlier, according to a forecast by Secretary of Economy and Finance Francis Tam. The jobless rate of 2.7 percent in the fourth quarter was the lowest since 1999, according to government statistics.
About 80 percent of Macanese own their homes, whose values are still at “a substantial discount” to properties in Hong Kong, about an hour by ferry, said Tom Ashworth, fund manager for Macau Property Opportunities Fund Ltd., which has about $333 million in assets and is developing residential projects including the Fountainside in Macau. Hong Kong home prices have surged about 60 percent in the past two years.
“That gap’s got to close,” Ashworth said. “It’s not going to go to parity, but we believe the current 70 percent discount to Hong Kong could definitely narrow to maybe 50 percent.” Ashworth compared prices at One Central Macau and Hong Kong’s Bel-Air, a luxury apartment project in Hong Kong’s Island South district where units are selling at about HK$20,000 ($2,567) a square foot.
Approval for new real estate and infrastructure projects has slowed since the jailing of a former senior government official in 2008 that sparked a series of anti-graft measures by the government, said Ronald Cheung, managing director for Macau at Midland.
About 2,500 new apartments in projects including the One Grantai and The Riviera Macau are expected to be completed in 2011, down from 3,400 in 2010, he said. Annual completion will probably fall below 1,000 in each of 2012 and 2013 before rebounding in 2014.
“This two-year gap will continue to push up both rents and prices for new units,” Cheung said. “Buyers are also mindful of the threat of inflation that’s driven by the low interest rates,” which are near 20-year low, he said.
What we still don't know about Lasik
As the surgery continues to plague patients like me, the man who approved it for the FDA pushes for a recall
BY ABBY ELLIN
How are your eyes?
That's all anyone ever wants to know these days: How my eyes are doing after my collision with Lasik almost three years ago. Are they still dry? Do they still hurt when exposed to sunlight? Is my vision still blurred? And what about glasses -- am I still wearing them?
The answer: Yes, yes, yes and yes. Emphatically, resoundingly, blindingly yes. My eyes sting. They burn. I look at neon signs and the colors bleed into a fluorescent Rorschach test. I have difficulty deciphering black lettering on white boards; I have personally helped elevate the stock of Allergan, which manufactures Refresh Plus, the drops that allegedly help dry eye.
Clearly, this is all very annoying, but at this point, I'm used to it. It's just one of the things I live with, like PMS and hangnails. And in the grand scheme of things, it's not so bad. According to Market Scope, LLC, an ophthalmic industry research firm, nearly 15 million procedures have been performed in the U.S. over the last decade, with a 95.4 percent patient satisfaction rate. Lasik is also a $1.6 billion industry -- which, as Michael Lewis points out in "The Big Short," was initially created to replace the revenue stream lost to declining cataract surgery reimbursement rates.
Ninety-five percent satisfaction is not awful (although of course it depends on what your definition of "is" is). It's the other 5 percent that worries me. I've interviewed people who've had corneal transplants because of botched Lasik, who've lost their jobs because they can't see -- like Los Angeles Dodger Jay Gibbons, who reportedly stopped playing winter ball in Venezuela because of blurred vision he acquired after Lasik surgery earlier in the season, the L.A. Times reported.
So all in all, I'm pretty lucky. But I think it's fair to say that I'm angry. Not just about my situation, but because this is an industry where it's almost impossible to find a reputable refractive surgeon to speak out on behalf of patients. If you've got a problem, it's your fault. I went to a dry eye specialist in New York City, a guy who wrote a book on the subject. He acknowledged that Lasik causes dry eye and that it's a major surgical side effect.
"Would you ever say that on the record?" I asked.
He shook his head somewhat sheepishly. "We do Lasik here," he explained. Aha! Talk about a smart businessman. He's got the problem and the solution under one roof.
Attorneys also have trouble finding doctors to testify for patients. On June 2, 2009, Todd Krouner, a lawyer in Chappaqua, N.Y., who has won millions of dollars for injured Lasik patients, cross-examined a Dr. Wing Chu in a case involving a patient with post-Lasik ectasia, a bulging of the cornea. Dr. Chu is medical director of the Eye-Bank for Sight Restoration, and an associate clinical professor of ophthalmology at Columbia University, among other appointments. He was hired by the defense to conduct an independent medical examination of the patient. Here's how that conversation went:
Krouner: "Is your version of the Hippocratic oath "first do no harm" translated "first do no harm to any ophthalmologist," is that your interpretation of the Hippocratic oath?"
Chu: "That's a part of it."
Oh. Good to know.
The hero here is a man named Morris Waxler, whom I wrote about last year for Salon. Waxler is a Ph.D. and a former branch chief of the FDA's Center for Devices and Radiological Health from 1995 to 1999. He was, in effect, the man responsible for approving Lasik vision enhancement lasers in 1997. Since that time, he has become rabidly anti-Lasik, publicly admitting that the FDA "screwed up" when it approved it.
Now he's taken his activism a step further. Last month, he filed a petition calling for the FDA to withdraw approval "for all Lasik devices and issue a Public Health Advisory with a voluntary recall of Lasik devices in an effort to stop the epidemic of permanent eye injury caused by lasers and microkeratomes used for Lasik eye surgery."
In his petition, Waxler maintains that the initial approval was based on data that was "dominated by Lasik surgeons working hand-in-glove with Lasik manufacturers. Data recently brought to light exposes this partnership for what it was: a classic example of the fox guarding the henhouse, wherein the primary arbiters of safety and effectiveness of Lasik devices were the device manufacturers and its collaborators." Consequently, he says, the FDA was deprived of knowledge of the full extent of Lasik injuries prior to and during FDA reviews of documents submitted in support of the safety and effectiveness of Lasik devices.
He adds that -- contrary to the FDA's own device-approval standard, which limits adverse events to 1 percent -- published scientific data shows that Lasik devices induce an average adverse event rate of about 22 percent "that persists beyond six months to five or more years."
Lastly, he says, the published data shows that Lasik devices transform healthy corneas into sick corneas that never completely heal; are permanently weakened, vulnerable to trauma and inflammation; cause neuropathic dry eyes; have pathology that progresses annually; are vulnerable to blinding corneal bulging (keratectasia); compromise night vision; have unstable vision corrections that regress; and require eye care that otherwise wouldn't be needed.
This is potent stuff. And it doesn't seem to be the rantings of a bored retiree. "The idea that I had such a hand in getting a product on the market that was messing people's eyes up is disgusting," he says. "My wife said, 'Why are you getting back into that mess? Leave it to other people.' But I couldn't leave it alone. The more I discovered about it, the worse it got. Rereading the applications to the FDA that I once read and reviewed and reviewing the published literature since then -- it's not a pretty picture."
It's not a pretty picture, but it seems to be pervasive among the FDA. According to a recent report in the Archives of Internal Medicine, of the 113 devices that the FDA recalled between 2005 and 2009 for posing serious health risks or even death, more than 70 percent had been approved because they were considered similar to other products on the market. "Our findings reveal critical flaws in the current FDA device review system and its implementation that will require either congressional action or major changes in regulatory policy," the authors wrote.
While Waxler stops a centimeter short of using the C word (that would be, "conspiracy"), he does wonder why doctors failed to report adverse, or negative, reactions after five or six months. "They didn't report the data," he says. "They said patients wouldn't come back because as far as they could tell patients were doing very well. It's like asking Iran how many nuclear sites they have and them saying, 'We don't have any.' And saying, 'OK, that's fine. We trust you.'"
The refractive surgery community, not surprisingly, is less than pleased with Waxler. The American Society of Cataract and Refractive Surgery stated that while they laud his commitment to Lasik safety (which they share), they "disagree with his science and conclusions."
"The vast preponderance of clinical evidence shows that Lasik is safe and effective -- a conclusion that the FDA has repeatedly re-affirmed in its multiple reviews of up-to-date information," they wrote. "By failing to follow standard scientific protocol, Dr. Waxler does a disservice to all LASIK patients -- including those few who have had serious problems and who deserve to have them clearly understood."
After talking with Waxler, I called, and e-mailed, and called, and e-mailed again, the FDA to no response. Finally, Karen Riley, an FDA spokesperson, shot me an e-mail: "FDA continues to monitor the safety and effectiveness of all devices, including the lasers approved for Lasik," she wrote. "In October of last year we provided a brief update on our role in a three-part study of Lasik that is still in the beginning phases. It is a project that we hope will yield additional insights about this procedure."
It was a nice pat response, but had nothing to do with Waxler's petition. That response came from David S. Buckles, Ph.D., the ombudsman for the CDRH, and was forwarded to me by a Lasik activist:
"I personally appreciate the effort by Dr. Waxler and colleagues to use this approach to raise these issues with the Commissioner's Office because this is an appropriate venue within which to propose changes to the means by which Lasik devices are regulated," Buckles wrote. "While we in CDRH do not have close contact with proceedings in the Commissioner's Office on this particular matter, my understanding is that the petition is under review at the Commissioner's level to determine whether to accept the petition for consideration.
If the petition is accepted for consideration, and subsequently members of CDRH are tasked to participate in the review, then we will have some visibility into the process. However, until that happens, the status of the petition is not within our cognizance."
In other words: Let's wait and see. And wait some more.
Realistically, of course, it's unlikely that Lasik will be banned. Plenty of people have had tremendously wonderful experiences. Even Todd Krouner, the lawyer, says that he "knows and respects too many honest, intelligent, competent Lasik surgeons, who 'eat their own cooking' and have had Lasik themselves," he says. "Still, I believe that the public deserves an honest study, free from the bias and influence of the Lasik industry.
There are bright doctors and trustworthy public health officials who have no financial interest in Lasik, who are certainly qualified to perform a credible study. Without that, I doubt that the public will be able to assess the true risks, benefits and alternatives to Lasik surgery. If doctors cannot agree among themselves about the true incidence of ectasia, or much more common dry eye syndrome, how is a patient ever supposed to make a truly informed decision?"
How indeed? It's a good question, and one I'd like to explore further. But not right now. My eyes hurt.
Abby Ellin is the author of "Teenage Waistland: A Former Fat Kid Weighs in on Living Large, Losing Weight and How Parents Can (and Can't) Help." Her website is AbbyEllin.com. She lives, works, and tries to see in New York City.
The other day I got a prescription for eyeglasses. This is not newsworthy in itself except for one thing: More than two and a half years ago I had Lasik (laser-assisted in situ keratomileusis), specifically so I could toss away the spectacles I wore for near-sightedness. I knew that eventually I would need reading glasses, but I would, I was assured, be able to see long-distance for a long time.
Problem is, I can't.
Not only is my vision blurred, but as I wrote in a 2008 article for the New York Times, I still see halos, and not the kinds with angels attached. It takes a good 10 minutes for my eyes to adjust to dimly lit rooms.
My eyes are scratchy and as dry as the desert. Yes, before I got the surgery I signed an "informed consent" saying I understood all the possible side effects, but I certainly never knew that they might last indefinitely, and that they would be more than "annoying," as my doctor promised.
But nearly three years later, they are still here. And while I could get an "enhancement" -- that's industry parlance for another surgery to correct errors -- frankly, the only thing I want near my eyes is mascara.
According to the American Society of Cataract and Refractive Surgery, most of the 13.6 million people in the United States who have had Lasik surgery since the first lasers were approved by the FDA in 1998 are pleased with the results. But others have experienced similar, if not worse, problems than I have.
Indeed, the estimated $2.5 billion industry has recently come under fire for its failure to acknowledge potential risks. Last spring, the FDA inspected about 50 Lasik facilities and found that many had no system in place for collecting and transmitting data to the FDA on patients’ reports of post-surgical "adverse events."
And in August, Consumer Reports Health released the results of a survey, which found that 55 percent of Americans who've had laser vision correction surgeries are still wearing glasses or contacts some of the time.
Fifty-three percent experienced at least one side effect within the first four weeks of the surgery; 22 percent of patients experienced them six months after surgery, especially dry eyes, halos, glare and starbursts around lights.
Still, the American Society of Cataract and Refractive Surgery emphasizes that Lasik surgery, which can cost up to $5,000, has a 95.4 percent patient satisfaction rate, based on an analysis of research worldwide from 1996 to 2008, said John Ciccone, a spokesman for the organization. The researchers evaluated 19 studies involving 2,022 patients that specifically addressed patient satisfaction.
"Based on everything we know from the literature, and everything I know from any other elective procedure, Lasik eye surgery is the most successful elective procedure performed," said Dr. Kerry Solomon, a cataract and refractive surgeon in Charleston, S.C., and a co-researcher on the study.
The experience of patients like Jeremy Fox, 26, a college student in Rockford, Ill., who got Lasik about four years ago, seem to support this assessment. Getting the procedure, he said, was one of the best decisions he has ever made. While he does experience some starbursts, he said "it’s not bothersome at all."
But the FDA and others are taking note of what they call "quality of life" issues. In October, the FDA, the Defense Department and the National Eye Institute announced in October a three-year effort to assess adverse effects of Lasik.
The effort will involve gauging how many active-duty military patients at the Navy Refractive Surgery Center in San Diego suffered post-surgical eye problems, and a series of national, multi-center clinical trials that will study the impact on quality of life following Lasik surgery in the general population. In addition, the FDA has reopened a public docket to receive comments through Nov. 15.
"We noted that there was little consistent evaluation of the issues," said Mary Long, an FDA spokeswoman, about the reasons for why the study was initiated.
Erik J. Rupard, a doctor and clinical researcher with the U.S. Army, is among those who think such scrutiny is necessary. "Lasik is the Tiger Woods of medical procedures: deeply and demonstrably flawed, but so many people love it that those few of us who speak ill of it are dismissed as cranks and/or loonies," he wrote in an e-mail message. "I saw lots of dry-eye complications in soldiers in Iraq who had undergone the procedure ostensibly because contacts are too unsafe in that dusty environment, and yet the Department of Defense has done no controlled studies to look at the cost -- human and otherwise -- of these post-refractive issues. I am a clinical researcher, and I know that Lasik, a cosmetic procedure, has never been subjected to the pre- or post-marketing scrutiny that we put even lifesaving drugs through."
Surf the Web and you can find dozens of stories from people who have had post-Lasik difficulties: dry-eye, halos, glare. Some complications have resulted in corneal transplants. Over the last few years patient activists have bombarded the FDA with anti-Lasik e-mails, complaints and petitions.
Among them is John Hoge, 39, a businessman in Port Jefferson, N.Y., who suffered from night glare and halos and regrets not choosing the "zero risk option" of corrective lenses. A few years ago he got some experimental contact lenses that have largely taken care of the glare issue. They are expensive, he added, and are not covered by insurance.
While the FDA's recent efforts have given some patient activists a modicum of peace, many do not feel it is enough. "By not inspecting every Lasik facility in this nation, how is the FDA to know if Lasik doctors are compliant?" said Dean Andrew Kantis, 40, a jet salesman in Fort Lauderdale, Fla., who has experienced double vision, starbursts, halos and dry eyes since getting Lasik in 1999, and operates the Web site LifeafterLasik.com.
Some experts believe the FDA should have taken more care when the first lasers were approved in 1998. "We screwed up," said Morris Waxler, a former branch chief of the FDA’s Center for Devices and Radiological Health Office of Science and Technology from 1995 to 1999. "You know how some drugs have a black box warning -- it’s dangerous because of this, this and this -- we could have done something comparable to that. We should have looked at the worst-case impact on patients, rather than just the very good outcomes we saw in the clinical trials."
Larry Pilot, a former associate director for compliance in the FDA’s bureau of medical devices, and currently a lawyer practicing food and drug law in Arlington, Va., agreed. "It appears that information to provide adequate informed consent was not sufficient for all prospective patients about occasions where a bad outcome could result," he said. “The present dissatisfaction rate of 5 percent is very high. Personally and professionally, I am very disappointed in the FDA."
Spokeswoman Long refutes the notion that the FDA was errant. "The FDA has reviewed safety and effectiveness information included in the manufacturer’s applications for approval," she wrote in an e-mail message. "We found them to be safe and effective when used as indicated and will continue to monitor their safety and effectiveness, in addition to taking necessary and appropriate steps to protect the public health."
Timothy A. Ulatowski, director of the FDA’s Office of Compliance at the Center for Devices and Radiological Health, sent out letters to Lasik ambulatory facilities last May reminding them that all risks must be mentioned in every Lasik advertisement online, in print, radio or TV.
"As part of our ongoing review of Lasik and its impact on public health, we continue to look at various aspects of Lasik advertising and how we can better improve public health," said Long.
Still, an informal online search showed dozens of doctors' Web sites that do not mention risks or side effects.
As for the new study, Larry Pilot is not impressed. "The FDA is beginning to do what should have been done 10 years ago," he said. "The bottom line here is that upwards of scores of thousands of human eyes have been irreversibly damaged unnecessarily."
Dr. Solomon disagreed, maintaining that the FDA clinical trials on Lasik lasers were "rigorous" and "well-performed." "I think the FDA did an outstanding job at evaluating the technology," he said. "And the technology and procedure since approval have only gotten better."
As for me, if I had to do it all over again I wouldn't. But hindsight, alas, is 20-20.
Abby Ellin is the author of " Teenage Waistland: A Former Fat Kid Weighs in on Living Large, Losing Weight and How Parents Can (and Can't) Help ." She lives, works, and tries to see in New York City.
Abby Ellin is the author of "Teenage Waistland: A Former Fat Kid Weighs in on Living Large, Losing Weight and How Parents Can (and Can't) Help." Her website is AbbyEllin.com. She lives, works, and tries to see in New York City. More: