Fri, Oct 24, 2008 - Page 11 News List

Real estate firms might face closures as sales fall

OPTIMISTIC EXPANSION Realtors have expanded the number of their outlets quickly from 3,861 in May to 4,057 in August, a 5.1 percent increase, despite the trend

By Joyce Huang  /  STAFF REPORTER

Dragged down by recent financial headwinds, local real-estate brokerage firms may suffer a series of closures over the next two months after completed property deals have seen a 35 percent decline since May, realtors said yesterday.

“If the slowdown of [property] sales is prolonged, which is highly likely by year’s end, smaller and less competitive realtors and even land developers may have a hard time operating,” an assistant manager at Evertrust Rehouse Co’s (永慶房屋) research and development department, Jeffrey Huang (黃增福), said by telephone yesterday.

Huang said that the sector is appalled to find the unexpected acceleration of such a slowdown, the likes of which hasn’t been seen since the earthquake of Sept. 21, 1999.

The latest statistics from the Ministry of the Interior showed that the number of property transfers declined by 35 percent to 26,527 in August from 40,839 in May when President Ma Ying-jeou (馬英九) took office.

Sales in Kaohsiung City, Taipei City and Taichung City in August saw some of the biggest drops of 45.9 percent, 42.7 percent and 41.4 percent respectively since May.

But at the same time, the sector continued to expand by opening a total of 4,057 outlets in August, up 5.1 percent from 3,861 stores in May.

Despite a worsening market, such expansion has shown no signs of slowing down as the nation’s total number of realtor outlets continued to climb to 4,139 this month, Evertrust Rehouse said.

Realtors in Taipei County and Taichung City have expanded quickly to see growth of 10 percent and 8.2 percent in the respective numbers of stores, Huang said, advising consumers to commission reliable companies and brands.

Another realtor also felt a similar chill.

Andy Hsieh (謝萬雄), vice president of Taiwan Realty Co (台灣房屋), said that deals on luxury homes in Taipei’s Xinyi (信義) and Da-an (大安) districts have “frozen to ice” as home owners with deep pockets refuse to haggle on prices and buyers are reluctant to up their offers. But he said that the company has seen a mild growth in sales in suburban areas such as Taipei County, Taoyuan City and Taoyuan County, where properties are reasonably priced with more space for price negotiation.

Uncertainty about the financial crisis’ fallout will continue to haunt home buyers, most of whom may be short of cash amid the stock slump, Hsieh said.

He said that Taiwan Realty has no plans to close any of its 200 outlets although it will put more focus on the viability and stability of franchise stores and its 68 direct-run shops in weathering the financial crisis.

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