The residential property market saw a sudden shrinkage in supply last month, with the monthly indicator flashing a recessionary “blue” light after showing a healthy “green” light in December and a “yellow-blue” light the previous nine months, the Chinese-language Housing Monthly reported yesterday.
The indicator’s score dropped 11 points month-on-month to 32 points last month.
But the score was still higher than the 25 points recorded last February, when a “blue” light was last seen, the report said.
The indicator is viewed as a seasonal adjustment and hardly points to another market crash, said Chen Yun-ru (陳韻如), chief executive of the monthly’s Web site.
SUPPLY CUT
“The decline of the indicator’s score was a result of a cut in supply by developers, most of which plan to release properties after the Chinese New Year or next quarter, banking on the nation’s improved economic fundamentals to support price hikes,” Chen said by telephone yesterday.
Properties worth a total of NT$20 billion (US$625 million) were put up for sale last month, 50 percent down from that of the previous month’s NT$35.3 billion, the magazine said in a press release.
A drastic cut in supply was seen in Taipei City and county and Taoyuan County, it said.
As home shoppers remain keen, Chen said that she expects builders and developers to push for record-high asking prices for new projects to be launched next quarter.
For example, newly built properties in Sindian (新店) and Sinjhuang (新莊) in Taipei County may test their record-high prices of NT$700,000 and NT$500,000 per ping (3.3m²) respectively in the second quarter.
But that could also increase the room for price negotiations if the nation’s economic prospects or the progress of a planned trade pact with China fail to support higher prices by June, Chen said.
The room for price negotiations slightly narrowed to an 11.2 percent discount last month from a 12 percent discount in December, Housing Monthly said.
FARGLORY
Meanwhile, Chao Teng-hsiung (趙藤雄), Farglory Group (遠雄企業團) chairman, was upbeat at a media briefing yesterday, predicting the nation’s housing market could continue to see price hikes of between 5 percent and 10 percent over the next five years.
Farglory has residential projects totaling NT$50 billion in the pipeline this year, he said.
The company plans to spend more than NT$10 billion to acquire land by the year’s end, he said.
Farglory has posted a rosier-than-expected earning per share at more than NT$9 last year, he said, half of which could be paid out as cash dividends to shareholders.
Farglory expects a better year this year, Chao said.
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