Tue, Dec 13, 2011 - Page 12 News List

Transaction bill sees shares tumble

ACTUAL VALUE:A realty researcher said the bill, which is likely to clear the legislature soon, could help address the information gap between buyers and construction firms

By Crystal Hsu  /  Staff Reporter

Shares in major construction firms tumbled an average of 3.05 percent yesterday, bucking the TAIEX’s 0.81 percent rise, as the housing transaction disclosure bill is scheduled to clear the legislature this week, fueling fears of price declines, analysts said.

Ruling and opposition lawmakers are discussing whether to put the package to a vote before the winter recess, which starts tomorrow, after the government over the weekend reiterated its resolve to push through the reform.

Lawmakers from the south voiced concern over the disclosure stipulation that requires real-estate agents, brokers and home buyers to register the actual property value online within 30 days of a transaction.

The clause, intended to help rein in runaway housing prices, will impose fines of between NT$30,000 and NT$150,000 on those who fail to comply or enter false information.

Shares in Farglory Group (遠雄集團), the nation’s largest land -developer by sales volume, plunged 5.39 percent to NT$49.10, while Huaku Development Co (華固建設) and Radium Life Tech Co (日勝生) shed 5.33 percent and 4.07 percent to close at NT$58.60 and NT$20.05 respectively, Taiwan Stock Exchange data showed.

Land developers have warned against the legislation, saying that it may be used to increase property levies when existing taxes are already confusing and complicated.

The government will have difficulty gathering real figures from small, unlisted developers even though they account for a big share in the market, Farglory chairman Chao Teng-hsiung (趙藤雄) has said.

Stanley Su (蘇啟榮), head researcher at Sinyi Realty Inc (信義房屋), the nation’s only listed broker, said the reform would further weaken sentiment in the short term, but may better protect buyers in the long run.

“The bill, if passed into law, would give land developers less room to set housing prices based on disingenuous advertisement campaigns,” Su said by telephone. “It can help address the information gap between buyers and construction companies.”

In particular, presale housing project prices have seen steep hikes in the Greater Taipei area in recent years on reports of an influx of Chinese capital and capital repatriation among Taiwanese overseas following the cut in the inheritance tax, Su said.

While improving cross-strait trade ties are positive for the market, its impact may be exaggerated, Su said.

“In the absence of objective and reliable guides, buyers very often have no choice but to take advice from construction firms,” Su said.

The housing market, which has yet to recover from the luxury tax, may cool further after the enactment of the disclosure bill, Su said, adding that policy uncertainty tends to be viewed as a negative development before things settle.

Home transfers in the capital shrank 34.08 percent year-on-year to 3,428 units last month, although the figure marked a 5.31 percent increase from October, according to data from the Taipei City Government released yesterday.

For the first 11 months, transactions totaled 46,496 units, with the whole-year number poised for an eight-year low, said Jessica Hsu (徐佳馨), spokeswoman for H&B Realty (住商不動產), the nation’s largest broker by number of franchises.

Hsu said the market was likely to remain sluggish because many prospective buyers are postponing purchase decisions until after the presidential election on Jan. 14.

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