Sat, Jun 17, 2017 - Page 11 News List

Taipei, New Taipei City home sales drop 13.69%

TAX INCENTIVE:One researcher said developers have been postponing completion of upscale projects to capitalize on possible luxury home tax cuts next year

By Crystal Hsu  /  Staff reporter

Presale projects and new home sales in Taipei and New Taipei City totaled NT$190.14 billion (US$6.27 billion) in the first five months of this year, a 13.69 percent slump from the same period last year, as builders and developers seek to digest inventory or delay launches until next year to enjoy tax cuts, analysts said on Thursday.

The decline remained steep, despite easing from a 20.79 percent retreat a year earlier, suggesting the new home market has not come out of the woods, especially for upscale housing due to high holding costs, Chinese-language Housing Monthly (住展雜誌) research manager Ho Shih-chang (何世昌) said.

“Although transactions have improved significantly this year, builders and developers have maintained a conservative strategy and have placed top priority on inventory adjustments over fears that new projects might heap selling pressure and hurt housing prices,” Ho said by telephone.

The cautious sentiment has been more evident in Taipei, where presale projects and new home sales fell 25.7 percent annually to NT$64.02 billion in the period, a Housing Monthly survey showed.

A lack of land supply and delaying tactics have also weighed on sales volume in the capital, where authorities have been contemplating whether to cut holding costs for luxury homes to stimulate the market, Ho said.

Taipei has imposed extra taxes on luxury homes built with expensive materials in popular locations to deter speculation, which — combined with hikes of other property taxes — have chilled trading of such properties, as evidenced by the absence of new projects in the city’s prime Xinyi District (信義) this year, he said.

Taipei officials have voiced plans to introduce a fixed formula for luxury home taxes and to offer discounts for six years to help stimulate transactions, with both initiatives likely starting in July next year.

The proposal has prompted developers to postpone completion of upscale projects to qualify for the tax cuts, Ho said.

For instance, according to Continental Development Corp (大陸建設) chairman Christopher Chang (張良吉), the firm has delayed completion of the 55 Timeless Tower in Xinyi to next year to attract more buyers.

Sales were better in New Taipei City, with presale projects and new home sales reaching NT$126.12 billion in the period, a 6 percent decrease from a year earlier.

The city’s Linkou (林口) and Sanchong (三重) districts saw the sharpest declines due to relatively abundant supply, the survey found.

Builders and developers have shifted focus away from old buildings and townhouses to commercial office buildings in a bid to promote urban renewal projects, property appraiser Honda International Asset Co (宏大資產) said on Thursday.

Over the past three decades, authorities have approved only 1,084 urban renewal project applications, even though 58 percent of properties in Taipei are more than 30 years old, Honda general manager Eason Chen (陳益盛) said by telephone.

“Commercial property owners are more practical and reasonable about property values, making the integration process less time-consuming,” Chen said.

Urban renewal projects remain difficult, but could gain momentum with deregulation and better floor space terms, he added.

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