The number of presale housing projects next year might shrink 10 percent to NT$1.48 trillion (US$51.83 billion), ending a four-year upward trend following a spate of unfavorable policies meant to keep property prices from rising, the General Chamber of Commerce (GCC, 全國商業總會) said yesterday.
The projected retreat would come amid softening buying interest after the central bank tightened credit controls on home purchases by companies, as well as unsold houses and land financing, GCC chairman Lai Cheng-i (賴正鎰) said.
The Ministry of the Interior has also banned the transfer of presale projects prior to their official launches and the Financial Supervisory Commission is stepping up inspections of mortgage operations by local banks.
Photo: CNA
“The government should learn to respect the market mechanism and quit intervention whenever house prices pick up,” said Lai, who owns Taichung-based Shining Group (鄉林集團) and luxury hotel brand Lalu (涵碧樓).
Higher building material prices and labor costs accounted for property price hikes this year, Lai said, adding that capital repatriation — by companies returning from China and those dodging higher income taxes abroad — also lent support.
Real demand, especially for industrial plots by reshoring companies, has driven land owners to engage in price gouging, but policymakers have held developers and builders accountable, he said.
Several companies have asked the chamber to help find industrial plots, as some are even more expensive than residential lots, an “unreasonable phenomenon,” Lai added.
Land deals and property development next year could weaken now that real-estate financing is capped at 55 percent, from 80 percent previously, he said.
The scenario bodes ill for the nation’s economic recovery and could discourage companies from moving production lines home from China, he said.
The property market has not fully recovered, as there are still few buyers for apartments of 100 ping (331m2) or more, Lai added.
First-time home buyers and people with relocation needs account for sales of most small apartments, he said, adding that such real demand would continue to bolster property prices.
GCC supervisor Hsieh Kun-chen (謝坤成) said that he welcomed the government’s crackdown on unlicensed presale project transfers and dishonest promotional tactics.
However, the government should grant a six-month grace period so that developers and buyers have time to adjust to tightened credit controls and honor prior purchase agreements, Hsieh said.
Funds would continue to flow to the property market amid abundant liquidity and low interest rates, he added.
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