Huaku Development Co (華固建設), the nation’s second-biggest residential apartment builder, said it expects revenue to fall for the second consecutive year on concern that higher interest rates will slow demand.
Revenue will drop 10 percent to about NT$8 billion ($250 million) this year, after declining 10 percent last year, vice president Susan Liu (劉若梅) said in a telephone interview on Tuesday.
“The central bank will take moderate steps to raise rates,” Liu said. “It will affect demand.”
The Taipei-based home builder expects the central bank to raise borrowing costs by 25 basis points in the second half, she said.
The central bank in December kept its benchmark interest rate at a record low of 1.25 percent, and pledged to monitor property-price inflation, fueling speculation it would shift policy this year.
Bank Governor Perng Fai-nan (彭淮南) said on Dec. 24 that home prices in the three major metropolitan areas had a “relatively high increase.”
An index of 34 construction companies more than doubled over the past 12 months, ranking the industry the second-best performing among 28 groups on the Taiwan Stock Exchange.
Huaku surged 125 percent in the period. The stock rose 1.11 percent to NT$82 in Taipei, compared with a 1.59 percent gain on the TAIEX. The developer trails Farglory Land Development Co (遠雄建設) in terms of residential-property sales in Taiwan.
Despite news that the Taipei City Government plans to impose higher taxes on luxury properties next year, shares of Farglory rose 1.06 percent to NT$66.5, while Prince Housing & Development Corp (太子建設) fell 4.59 percent to NT$13.5.
Huaku, which sold apartments for as high as NT$700,000 a ping last year, plans to build five residential unit and two office buildings this year, Liu said. The new projects may contribute NT$4 billion in sales this year, Liu said, adding the company expects to book another NT$4 billion in revenue from old projects.
Banks have cut mortgage rates to the lowest since records began, helping drive up home prices in the Taipei metropolitan area 20 percent last year, said Stanley Su (蘇啟榮), a senior researcher at Sinyi Realty Co (信義房屋), the nation’s biggest real-estate brokerage.
The price increase was the biggest since the brokerage began tracking housing prices in 1991, Su said.
Banks increased home loans by 4.3 percent to a record NT$4.91 trillion at the end of December from a year earlier, central bank data shows.
“The price hike last year was fueled by low rates and excess liquidity,” Su said. “It’s unrealistic to think the home market will have the same level of price increase this year.”
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such