Property builder Huaku Development Co (華固建設) yesterday said that it is planning to slow down land acquisition this year, although the worst is likely over for the local housing market.
“Housing prices in Taiwan might consolidate over the next three years, so we had better be patient and see how the correction pans out,” Huaku chairman Chung Jung-chang (鍾榮昌) told a shareholders’ meeting in Taipei.
Some industry watchers have said the housing market is likely to rebound, after the central bank on May 24 announced conditional easing of some prudential measures regarding housing and land loans. However, others believe there might be more downside risks for prices, as affordability remains an issue for first-time home buyers.
The builder plans to avoid aggressive land acquisition, giving the company more financial muscle to weather the softening market, Chung said.
Huaku aims to digest inventories at four apartment complexes in Taipei and Taoyuan by the end of this month and start construction of a new project in New Taipei City’s Tucheng District (土城), the developer said, adding that sales for the new residential project have hit 60 percent.
Construction for a presale project in Taipei is slated for August and work on an urban renewal project in Taoyuan is planned for the fourth quarter, Chung said.
Chung said he hoped that might lead the housing market to fare stronger later in the year.
However, the company would halt new investment in China after digesting inventory on hand, Chung said, adding that the process might last through the end of next year.
At the meeting, shareholders approved a plan to distribute a cash dividend of NT$5.0 per share based on last year’s net profit of NT$2.65 billion (US$82.23 million), or earnings per share of NT$9.59, and another NT$0.5 from statutory reserves.
That would suggest a 9.7 percent yield based on Huaku’s closing price of NT$56.6 yesterday, Taiwan Stock Exchange data showed.
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New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last