The nation’s new home market indicator flashed “yellow-blue” for a second straight month last month, suggesting it is shifting gears, as developers turned more upbeat, but transactions showed little improvement, the Chinese-language Housing Monthly (住展雜誌) said in a report yesterday.
The business climate gauge gained 3.3 points last month to 38.6, as developers placed more advertisements in a bid to boost transactions during the spring sale season, which runs from late March to early May, magazine editor Jim Shih (施絢傑) said by telephone.
Shih attributed the pickup to more active promotional campaigns, but added that it was still unclear if the strategy had paid off.
The magazine revised down its forecast on the total value of presale and newly completed houses by 34 percent to NT$300 billion (US$9.96 billion) this season, from its previous forecast of a record NT$450 billion, due partly to delays in the issuance of building permits, Shih said.
The downward revision still represents a 36 percent gain from NT$219.8 billion during the same period last year, but the publication warned against linking the increase to a fast recovery.
The sub-indices on presale projects and newly finished homes rose to 8.35 and 5.55 last month, from 7.63 and 5.0 in February, while the advertisement gauge climbed from 5.68 to 6.88, Shih said.
“The trend surely reflects a sentiment upturn on the part of suppliers and they are likely to spend more on advertising in the coming months,” Shih said.
Developers and builders are focusing their marketing resources in the first half and plan to lie low in the second half as the nation gears up for the seven-in-one elections, he said, adding that buyers are likely to stay on the sidelines until the political uncertainty settles.
It is better not to read too much into the increase in advertising dollars given the limited impact on transactions, the analyst said.
The sub-index on transactions was flat at 5.16 last month, while the price concession gauge was steady at 6.49, the magazine indicated.
More aggressive promotional campaigns do help increase the number of prospective buyers, with the sub-index rising from 5.38 to 6.15 last month, and should continue to raise the overall score this quarter, Shih said.
“The demand side appears cool-headed this time around, thanks to increasingly unaffordable housing,” he said.
Smaller apartments in locations with convenient transportation links dominated the market and should remain popular going forward, the analyst said.
In related news, foreclosure auctions in the nation’s five special municipalities dropped drastically last quarter due to retreating purchase interest, H&B Realty Co (住商不動產) said.
The price gap between foreclosed houses and market rates has rapidly narrowed in recent years, prompting buyers to lose interest, the broker said, adding that potential ownership disputes further weakened their appeal.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Rick Cassidy, the chairman of Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) US subsidiary, TSMC Arizona Corp, plans to retire, but the company has yet to name a successor. After Cassidy made his intention to retire known, TSMC Arizona held a special general meeting and approved a resolution that Cassidy would not continue as chairman and would not remain as a director, TSMC said in a statement filed with the Taiwan Stock Exchange last night. The meeting also approved a plan to appoint TSMC Arizona president Rose Castanares as a director, the company said, adding that Cassidy has been named as an advisor
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
RSS