Major Taiwanese developers are moving their property funds south, as limited supply makes land acquisition increasingly difficult and unaffordable in the north of the country, the Chinese-language MyHousing magazine said.
The southward migration become more evident after Farglory Land Development Co (遠雄建設), Lih Pao Construction Co (麗寶建設), Huaku Development Co (華固建設) and Fubon Land Development Co (富邦建設) recently made land purchases in Greater Taichung and Greater Kaohsiung, magazine spokesman Ni Tzu-jen (倪子仁) said.
Fubon Land, an affiliate of Fubon Financial Holding Co (富邦金控), plans to roll out an upscale housing project near Greater Taichung City Hall next quarter, encouraged by the popular reception given to a similar complex nearby upon its completion, Ni said.
The complex’s units are likely to be priced at between NT$600,000 and NT$700,000 (between US$20,230 and US$23,690) per ping (3.3m2), and are expected to generate NT$10 billion in sales, the magazine said.
Farglory Land, a member of the Farglory Group (遠雄集團), which also owns Farglory Life Insurance Co (遠雄人壽), Farglory Hotel (遠雄悅來飯店) and Farglory Free Trade Zone (遠雄自由貿易港區), last month acquired a 3,087 ping plot of land in Greater Taichung for NT$1.27 billion, on which it plans to construct a 21-story residential building.
The project will be Farglory Land’s first in central Taiwan, where its peers have been present for several years to meet the growing demand for luxury housing there, Ni said, adding that the residential building is forecast to generate NT$6 billion in revenue.
Not wanting to be left on the sidelines, Lih Pao Construction, associated with the Lihpao Land Amusement Park (麗寶樂園) in Greater Taichung, is also jumping on the bandwagon, with plans to erect a housing complex valued at NT$12 billion in the municipality next year, Ni said.
Huaku Development, which has limited its business to northern Taiwan, acquired a plot of land measuring more than 1,000 ping in Greater Kaohsiung in April that it plans to turn into an apartment complex with 17,000 ping of total floor space.
In a departure from its usual business strategy, the developer has made clear its ambition to acquire land inventory across Taiwan, Ni said.
Additionally, Chong Hong Construction Co (長虹建設), Huang Hsiang Construction Co (皇翔建設) and Hung Poo Real Estate Development Co (宏普建設) are scouting for land in the central and southern parts of the nation to expand their businesses, he said.
The development bodes well for the future of the property market, despite political uncertainty possibly weighing down the sector in the short term and growing concerns about a potential interest rate hike by the central bank, several construction companies said.
Shining Building Business Co (鄉林建設) chairman Lai Cheng-yi (賴正鎰) said that the markets at home and abroad remain awash in liquidity in the wake of the US Federal Reserve’s surprise decision earlier this month to continue its US$85-billion-a-month bond-buying program.
Shrugging off concerns about a possible rate hike by the central bank, Lai said high market liquidity will continue to push home sales higher this month.
September is one of the peak periods for property sales in Taiwan, with developers unveiling new projects they hope will contribute significantly to their annual sales.
In northern Taiwan, property developers have launched NT$179.4 billion worth of residential property projects so far this month. The figure is the second-largest amount seen over the past five years, after the NT$218.9 billion recorded in September last year, according to MyHousing.
Sinyi Realty Inc (信義房屋) manager Lin Chao-chang (林朝昌) said it is unlikely that the central bank will push interest rates too high or too quickly in the near term.
This month’s sales campaigns can be expected to boost property developers’ revenue for the fourth quarter, particularly in light of their efforts to introduce new products to homebuyers, he added.
Lin also said that although some lawmakers are pushing for a revision of the luxury tax to tighten restrictions on home sales, there is little chance of market sentiment being affected immediately, given the ongoing standoff in the Legislative Yuan.