Developers plan to launch NT$115.2 billion (US$3.53 billion) worth of presale home projects in northern Taiwan during the fall sales season, 4.3 percent less than they did a year ago, analysts said yesterday.
“The modest retreat reflects caution on the part of building companies, many of which have no choice but to introduce new projects to guarantee stable income under new accounting rules,” Ho Shih-chang (何世昌), research manager at Chinese-language magazine Housing Monthly (住展雜誌), said by telephone.
The fall sales season, which runs from the third week of September to the end of October, is traditionally the high season for putting new projects on the market after the spring campaign in April.
Building companies, especially listed ones, might not be able to book any income if they do not introduce new projects, Ho said.
Under the new rules, developers cannot record profits from home projects under construction. Previously, accounting rules allowed profit recognition in proportion with the progress of construction.
Two and three-bedroom apartments remain the mainstream products as builders seek to woo first-time buyers while investors flee the market, Ho said.
There are 14 projects in Taipei with an overall sales volume of NT$17.75 billion, according to a survey by Housing Monthly.
Developers plan to introduce 27 presale projects in New Taipei City’s Linkou (林口), Sanchong (三重), Xindian (新店) and Wugu (五股) districts, with a projected volume of NT$44 billion, the magazine survey found. There are 20 projects planned in Taoyuan, with a projected combined revenue of NT$28.78 billion, the survey found.
Apartments with price tags of about NT$20 million are considered most acceptable in Taipei, Ho said, but the acceptable price tag drops to NT$15 million for New Taipei City properties and NT$12 million in Taoyuan and elsewhere.
Ho said it is harder to find buyers for homes priced at NT$40 million or more, given mortgage restrictions and affordability concerns.
However, a few companies are pressing ahead with luxury projects in Taoyuan in the hope that the market may regain confidence after the presidential and legislative elections in January, he said.
Luxury projects appear the only choice for some builders because of the high land acquisition costs involved, Ho said.
More luxury projects could enter the market around the nation next year, property research company HouseFun (好房網) said.
The strategy, while reasonable in light of cost concerns, poses a great challenge to the market given the steep tax hikes for holding onto luxury homes, HouseFun boss Ni Tze-jen (倪子仁) said.
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