Sales of newly constructed homes totaled NT$122.24 billion (US$3.76 billion) over the so-called “May 20 sales season,” down 30 percent from a year earlier, as builders and developers prefer to wait and see how the change of government and the nation’s poor economic performance pan out, the Chinese-language Housing Monthly said.
Many construction companies have adopted a conservative strategy for this special sales season, which falls between Sunday and June 15, ahead of the inauguration on Friday next week of Democratic Progressive Party president-elect Tsai Ing-wen (蔡英文), magazine research manager Ho Shih-chang (何世昌) said.
On the campaign trail, Tsai pledged a more equitable distribution of wealth and to address growing housing inaffordability.
Some builders moved the launch of presale projects ahead to the spring sales season — between March 29 and April 30 — after the central bank on March 24 cut interest rates for the third time in six months and lifted mortgage restrictions on houses in Taipei and popular districts of New Taipei City, Ho said.
That explained why new home construction in northern Taiwan reached NT$194.9 billion during the spring sales season, 10 percent higher than previously forecast and diluting the volume for the current season, Ho said.
The volume of NT$122.24 billion is the lowest for this period since the global financial crisis in 2008 and 2009, the report said.
The cautious sentiment might dissolve if the new administration proves to be benign toward the industry, Ho said.
New Taipei City has the most new home projects, with an aggregate value of NT$54.6 billion, accounting for 44.67 percent, the report said.
In particular, the districts of Banciao (板橋), Sindian (新店) and Yonghe (永和) all reported new housing projects worth more than NT$10 billion, the report said.
Taipei ranks second, with new home construction sized at NT$38.6 billion, followed by Taoyuan at NT$13.78 billion, the report said.
New home construction amounts to NT$7.06 billion in Hsinchu and NT$5.2 billion in Yilan, the report said, adding that the volume in Keelung stands at NT$3 billion.
Policy uncertainty aside, the soft economic showing also weighs on the building industry, Ho said.
Heavyweight technology companies have offered conservative guidance about their business prospects for the current quarter and beyond after taking a hit from global headwinds last quarter.
It remains to be seen if the situation is to improve with the advent of high sales season for technology products in the second half of the year, thereby boosting the economy as a whole.
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