FEATURE: New Year rings in a new pitch from real estate agents

The Lunar New Year vacation is not a traditionally busy season for house hunting, so some real estate developers are giving out hongbao (red envelopes) and prizes to buyers who seal a deal.

"It's for bringing good luck to both buyer and developer, although not everyone can be guaranteed satisfaction with the giveaway," said Chung Yin-tang (鍾尹堂), chairman of the market information committee at the Taichung Real Estate Development Association.

Unlike most developers in northern Taiwan who are enjoying precious time off work, Far Glory Group (遠雄集團) is launching promotions over the six-day vacation to attract local buyers who have been too busy to look for a new home.

"We are very optimistic about New Year sales this year, as house-hunting trips to our sites will be fun with all the food and prizes," said Tsai Chung-i (蔡宗易), assistant vice president of Far Glory's business management department.

Tsai said the company saw a 50 percent increase in daily sales during the New Year vacation last year, averaging a total of NT$150 million (US$4.7 million) a day.

Chung, who is also president of Taichung-based Hsin Yeh Development Co (新業建設), said the property market in Taichung had seen a prosperous year with the completion of infrastructure such as a baseball stadium, the high-speed railway and a seventh rezoned development district.

Pre-sale properties worth a total of NT$175.5 billion were made available last year in central Taichung, 45 percent up from the year before, Chung said.

However, the number of pre-sale units decreased by some 20 percent from 2006 to total 10,470 units last year because most developers were pursuing buyers of luxury homes, he said.

But Chung is maintaining a neutral outlook for the nation's property market because the recent global stock slump has cost potential homebuyers dearly, especially within the ranks of the wealthy.

He believes that the real estate market may see a rebound late next month following the presidential election.

"Promotional sales may be launched during the March 29 vacation to attract buyers," Chung said, adding that a further boost may follow the presidential inauguration on May 20.

But Chung believes that the market may only see a sustained boom later this year when political uncertainties and economic worries ease.

Even so, property developers in northern Taiwan are less optimistic about this year's prospects because there has been a limited amount of land available in Taipei for new housing projects.

Chen Chin-hui (陳清暉), a vice president at Pacific Construction Co (太平洋建設), said that the local property market had its best run late last year.

The company spent only two months to sell every unit of a NT$2.4 billion housing project in Taipei's Nangang District (南港). The project had an average closing price of some NT$500,000 per ping (3.3m2) -- with a top price of NT$600,000 per ping -- which represented a 67 percent increase on the internal price of NT$300,000 per ping, Chen said.

The recent credit crunch over mortgages spelled bad news for potential home buyers, Chen said, and he wasn't upbeat about the prospects of the property market in Taipei, which only high earners can afford to enter, although there was an upside for customers.

"There will be a 10 percent to 20 percent space for price negotiation," he said.

Chen was more pessimistic about the market in Kaohsiung, saying that the company's NT$400 million project there, which was launched five months ago, has only seen a 60 percent closing rate.

"The market there is at rock bottom," he added.

A salesperson at a Kaohsiung-based affiliate of Chinatrust Real Estate Co (中信房屋) agreed, adding the market there had stagnated since the middle of last year.

Traditionally, he said, most agents open all year round -- except for the Lunar New Year vacation, as government offices do not process documents relating to home purchases.