King’s Town Construction Co (京城建設), the largest land developer in southern Taiwan, expects earnings to pick up this quarter and next year after adopting a conservative strategy for much of this year amid policy uncertainty, a senior executive said yesterday.
The company, the main subsidiary of Greater Kaohsiung-based King’s Town Group (京城集團), posted NT$2.38 billion (US$78.3 million) in revenue for the first nine months, down 39.5 percent from a year earlier, as the mayoral elections next month affect buyers sentiment, King’s Town deputy spokesman Bruce Chou (周敬恆) said.
The developer put NT$7.5 billion worth of new projects on the market this year, while some peers have opted to sit it out due to political uncertainty.
After selective credit controls and tax hikes, the government is mulling imposing heavy income taxes on property transaction gains, chilling home sales and fanning expectations of price falls.
King’s Town managed to uphold its floor prices for existing projects and plans to raise prices for new ones, because of their good locations and a savvy pricing strategy, Chou said.
The company is finishing the construction of an apartment complex containing 240 units in the central district of Kaohsiung and might benefit from an extra 130 apartment units next year, he said.
King’s Town set prices 20 percent higher than floor prices, allowing the company ample room to accommodate price cut requests, Chou said.
Downward price adjustments for ongoing home projects are unlikely, if not impossible, because doing so would alienate previous buyers and trigger refund requests, Chou said.
King’s Town is offering buyers free decorations or home appliances to facilitate deals, he said.
Housing prices in less popular locations of Kaohsiung are also holding steady, Chou said, attributing that to relative affordability.
King’s Town declined to give pricing details, but said that home prices average about NT$200,000 per ping (3.3m2).
King’s Town shares closed down 0.95 percent at NT$26.1 yesterday, slightly better than the TAIEX’s 0.97 percent fall, Taiwan Stock Exchange data showed.
King’s Town shares have dropped 10.15 percent this year, compared with the sector’s 17.84 percent plunge and the main index’s 0.4 percent rise, according to stock exchange figures.
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