Developers and construction companies have launched NT$179.5 billion (US$5.97 billion) of new construction and pre-sale projects for the May 20 season, soaring 52.1 percent from a year earlier, as the impact of unfavorable policies fades away, a survey by the Chinese-language magazine Housing Monthly showed.
The construction volume marked the highest since the magazine launched the survey in 2008 and lent support to a confidence recovery on the part of builders nearly two years after the government imposed the special sales levy, or the luxury tax, in a bid to cool down the property sector.
“Property developers and agents have gradually emerged from the tightening measures as evidenced by their aggressive approach to business,” Housing Monthly researcher Chung Chia-ti (鍾鎵地) said.
The rebound in both housing transactions and prices in the first quarter of this year also helped prop up the optimistic sentiment, Chung said.
The volume of new construction projects expanded 3.8 percent during the January-to-March period to NT$315.3 billion from three months earlier, while average prices edged up 2.91 percent, according to a quarterly report by Cathay Real Estate Development Co (國泰建設).
The volume equaled a 54.7 percent increase compared with the same period last year.
New Taipei City (新北市) topped the nation’s areas, with the volume of new construction projects reaching NT$67.5 billion, or 37.6 percent of total projects, as builders are upbeat about relatively affordable housing in Linkou (林口), Danshui (淡水) and Wuku (五股) districts, Housing Monthly said.
Taoyuan County ranked second, with new housing projects valued at NT$44 billion, as developers capitalize on the county’s upcoming upgrade into a special municipality, the magazine said.
Together, Taoyuan County and New Taipei City account for 80 percent of new construction project and the planned extension of the mass rapid transit system will significantly shorten transportation time between Taoyuan and Taipei, the publication said.
New housing projects reached NT$18.7 billion in Taipei during the May 20 season, Housing Monthly said.
The publication attributed the figure to a tight land supply, as well as increasingly unaffordable housing prices, in the capital.
“That explains why new construction projects in Taipei are focused on the Beitou District [北投],” Chung said.
The steep increase in the volume of new construction projects should not be viewed as a return to “property fever,” but rather the delayed sales schedule caused by the luxury tax as the Ministry of Finance is to review the tax next month, Chung said.
“If the government is serious about stimulating domestic demand, further restrictions would be unfavorable,” Chung added.