Presale housing projects could rise by a double-digit percentage this year from last year due to continued economic improvement, but most of the projects are to be launched in the next six months to avoid the uncertainty related to year-end elections, the General Chamber of Commerce (GCC, 商業總會) said yesterday.
Presale projects offered could increase 21 percent, from NT$745.5 billion last year to NT$900 billion (US$25.19 billion to US$30.42 billion) this year, as healthy economic fundamentals at home and abroad give builders and developers more confidence, said GCC chairman Lai Cheng-yi (賴正鎰), who also heads Shining Construction Group (鄉林集團).
“Small apartments of between 18 ping and 25 ping [59.5m2 and 82.6m2] will be the mainstream products as bigger ones have difficulty finding buyers,” Lai said, adding that apartments smaller than 55 ping account for more than 90 percent of the market.
The central bank has implemented credit control measures on luxury homeowners, limiting mortgages to 60 percent of the evaluation, about 10 percent less than for typical mortgage applications.
Developers plan to launch most presale projects in the first half of this year as campaigning policymakers tend to vent rhetoric unfavorable to real-estate developments.
Taiwan is due to elect new local administrators and councilors by the end of this year.
Urban renewal projects are expected to dominate the Taipei market due to a lack of land, Lai said.
Shining moved staff from Taipei to its headquarters in Taichung last year, when they were unable to locate enough plots of land in the capital, he added.
New Taipei City will remain the most popular area for presale projects due to active transactions in Banciao (板橋), Tamsui (淡水) and Sinjhuang (新莊) districts, Lai said.
Despite an improving economy, price concessions of 10 to 15 percent are necessary to facilitate transactions, he said.
“Many prospective buyers would otherwise stay on the sidelines due to concerns over affordability and price corrections,” Lai added.
A growing number of people view real estate as an investment tool to generate rental yields and thus prefer small apartments, GCC supervisor Hsieh Kun-cheng (謝坤成) said.
The population decline also lends support to building small apartments, he said.
The chamber is pushing to abolish property taxes of up to 45 percent on houses resold within two years of purchase, Lai said.
“The government should think twice about keeping property taxes at unfavorable levels with real estate-related jobs totaling about 3 million,” he said.
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