New home projects in northern Taiwan are likely to rise 10 to 15 percent this year from last year, when new construction volume dropped 13.6 percent to its lowest in more than a decade because of unfavorable policies, a local real-estate magazine said yesterday.
Developers and construction firms plan to introduce presale and newly-completed home projects valued between NT$1.28 trillion (US$40.68 billion) and NT$1.33 trillion this year, up from NT$1.16 trillion last year, despite lingering policy uncertainty that might slow transactions, Chinese-language Housing Monthly reported.
“While braced for an extended soft market period, some builders intend to roll out new projects ahead of tightened floor area rules,” Housing Monthly research manager Ho Shih-chang (何世昌) said by telephone.
Starting in July this year, authorities will cut floor area ratio preference, driving builders and developers to apply for new building permits so that they can construct new homes at a lower cost.
The stiffer criteria aim to help improve living quality and cool the property market.
In addition, companies in some traditional sectors have announced plans to revitalize idle real-estate assets this year, moves that should boost construction volume this year by over NT$150 billion, Ho said.
Chunghwa Telecom (中華電信), the nation’s biggest telecoms operator, has entered a joint venture to develop a residential complex near Taoyuan’s high-speed railway station, the report said.
Motorbike manufacturer Sanyang Industry Co (三陽工業) and tire maker Nankang Rubber Tire Corp (南港輪胎) both plan to turn old factories into hotel and office buildings in Taipei’s Nangang District (南港), the report said.
Likewise, home appliance manufacturer Tatung Co (大同) and industrial motor maker Teco Electric & Machinery Co (東元電機) are working to build residential complexes in old factory sites in New Taipei City’s Tucheng (土城) and Sinjhuang (新莊) districts, the Housing Monthly report said.
Presale project and new home prices are likely to stay unchanged this year, as unfavorable tax plans are feeding price correction pressures, but developers might refuse to budge due to ample liquidity and low interest rates, Ho said.
The Ministry of Finance has suggested imposing heavy income taxes on property gains based on real trading prices in a drastic bid to curb soaring home prices.
“Major builders and developers are generally prepared for a weak market until after the presidential elections in the spring of 2016,” Ho said.
The tug-of-war would continue to depress transactions this year and property brokers and agents would bear the brunt of the light trading, the researcher said.
Small brokers might go out of business if the trend persists, he added.
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