New home construction may drop 25 percent annually this year, with developers sitting on the sidelines for the second half after the central bank extended credit controls beyond Greater Taipei to curb soaring housing prices, builders and brokers said yesterday.
“[The value of] new home projects will struggle to hit NT$600 billion [US$20.03 billion] this year, from the previous forecast of between NT$800 billion and NT$1 trillion, as construction companies will stay in the background until the housing regulations drama cools,” Greater Taichung-based Shining Group (鄉林集團) chairman Lai Cheng-i (賴正鎰) said.
Shining Group owns a construction company and operates the luxury hotel Lalu (涵碧樓).
Lai, who also heads the General Chamber of Commerce (商總), said his company has slowed spending on advertising and peers would do the same as the government is bound to introduce more squeezes on credit in the run-up to elections in November.
The central bank on Thursday extended selective credit controls to four more districts in New Taipei City and Taoyuan County where prices have risen sharply after the cost of housing in Taipei priced many wishing to buy property out of the market.
The monetary policymaker caps mortgage loans for second homes in Taipei, 17 districts of New Taipei City and 4 in Taoyuan at 60 percent of their market value.
In addition, it set the loan-to-value limit to 50 percent for third homes across the country and tightened luxury housing thresholds to NT$70 million in the capital, NT$60 million in New Taipei City and NT$40 million elsewhere, from NT$80 million for Greater Taipei and NT$50 million in other parts of Taiwan.
Luxury home loans may not exceed 50 percent of their value, from 60 percent previously.
The new credit controls came after the Ministry of Finance recently raised tax burdens on extra homes from 1.5 percent to a maximum of 3.6 percent to make holding extra houses more expensive.
“Property brokers will bear the brunt of the latest tightening measures with transactions already declining due to political instability,” Lai said, adding that builders like Shining Group will delay the launch of new projects, but cash-strained peers may not be able to afford the strategy.
Developers are also expected to avoid building luxury housing, the obvious target of selective credit controls, Lai said.
Sinyi Realty Inc (信義房屋), the nation’s only listed broker, said the new restrictions aim to discourage property investment, which is frequently blamed for the steep increase in housing prices seen in the past six years.
“The tightening measures will upset the market for a while but will have very limited impact on first-time home purchases, the main driver these days,” Sinyi head researcher Stanley Su (蘇啟榮) said.
Evertrust Rehouse Co (永慶房屋) expects housing prices to hold steady in Greater Taipei, but to come under pressure for a decline in districts with a heavy supply.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to