Sat, Jan 24, 2009 - Page 11 News List

Property sector takes stock of year’s roller-coaster ride

HOUSING After a nerve-wracking 2008, insiders in the construction sector said the local property market was likely to see an uptick in the second half of this year

By Joyce Huang  /  STAFF REPORTER

The nation’s property market experienced a roller-coaster ride last year, with sales seeing a sudden freeze in the second half, in tandem with the deteriorating economy, several construction-related companies said yesterday.

“Sales dropped almost by half in the second half [of last year],” Benson Liao (廖本勝), president of Evertrust Group (永慶集團), parent of Evertrust Rehouse (永慶房屋), told a year-end media briefing yesterday.

Evertrust, the nation’s second-largest housing agent, yesterday reported NT$4.8 billion (US$142.5 million) in pre-audited revenues for last year, excluding revenues from China.

The pre-audited figure represents a 5 percent increase from one year earlier and is much lower than the annual growth of 40 percent the firm saw in previous years, Liao said.

The company did not release its latest earnings figures yesterday.

The total deals closed last year reached NT$230 billion in terms of dollar value, which also represented a 5 percent increase from the previous year.

Evertrust foresees another year of mild growth ahead.

The real-estate broker expects to see the value of closed deals reach NT$270 billion this year, with full-year revenues from Taiwan exceeding NT$5 billion, Liao said.

Bucking the trend, Evertrust yesterday said it planned to open 100 outlets, including 20 more in Shanghai, while recruiting 3,000 employees this year at a total of 500 outlets in Taiwan and Shanghai.

In three years, the realtor, which spent around NT$60 million to host year-end parties for employees recently, plans to expand into operating more than 1,000 outlets across the Taiwan Strait, a company press release said.

Looking ahead, Liao said that lower interest rates have provided a strong incentive for rental tenants to shop for permanent homes, but he expects residential properties to see another 10 percent price cut before buyers will actually make investments.

Nevertheless, he estimated that the local property market was likely to bottom out by June.

Stanley Su (蘇啟榮), research director at Sinyi Real Estate Inc (信義房屋), the nation’s largest housing agent, agreed that the market may see an uptick in the second half of this year, although the economy is expected to worsen in the first half.

The government’s preferential mortgage loans have succeeded in attracting new buyers, he said, citing government statistics, which showed 29,000 deals had been closed last month, up from 23,000 deals in November.

Sinyi had previously reported NT$5.58 billion in pre-audited revenues for last year, up from NT$5.51 billion in 2007.

“The sector, including sales of luxury homes, storefronts and residential properties, has been hardest hit from late last year,” Sinyi spokesman Vincent Chen (陳文祥) said yesterday.

Both companies declined to make public their net profits for last year.

Despite an underperforming year last year, two of the nation’s biggest construction companies have recently reported rosier-than-expected performance.

Huaku Development Co (華固建設), last week, reported a record high of NT$10.032 billion in revenue for last year, up 27 percent from the previous year’s NT$7.9 billion.

Huaku’s before-tax profits reached NT$2.73 billion, up 22.7 percent from NT$2.23 billion in 2007, or an earning of NT$11.72 per share.

Meanwhile, Farglory Land Development Co (遠雄建設) delivered 19 percent revenue growth for last year to NT$17.1 billion.

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