Taiwan’s developers and brokers reported a significant pickup in earnings over the past three quarters, as strong real demand and liquidity, as well as low interest rates, helped the housing market recover quickly from a COVID-19-induced slowdown.
Revenues at Highwealth Construction Corp (興富發) soared 94.7 percent year-on-year to NT$34.69 billion (US$1.25 billion) in the first three quarters of this year, with net income more than doubling to NT$7.39 billion, or earnings per share of NT$5.89.
The Taipei-based developer attributed the uptrend to recognition of profits from newly completed housing projects in New Taipei City, Hsinchu and Tainan.
Photo: Hsu Yi-ping, Taipei Times
The three projects generated NT$3.29 billion, NT$5.28 billion and NT$7.31 billion in sales respectively, the company said, adding that it would book profits from the eight projects it has running except for the ones in Taichung and Kaohsiung, whose profit would be partly recognized next year.
Gross margin increased 3.5 percentage points to 31.2 percent on the back of housing price increases, despite government efforts to reverse the trend, it said.
Highwealth Construction, whose plot acquisition strategy has been described by experts as more aggressive than its peers, on Thursday acquired a central Taichung plot of 733 ping (2,418.9m2) for NT$2.09 billion, saying that that it would build residential complexes with three and four-bedroom apartments on the plot, as such apartments are trending.
Sinyi Realty Inc (信義房屋), the nation’s sole listed housing broker, posted NT$1.68 billion in net income for the first nine months, up 78.7 percent from the same period last year.
Taiwan’s vibrant economy and low interest rates allowed buying interest to recover soon after a local COVID-19 outbreak had significantly eased in late July, Sinyi said, adding that housing prices received support from soaring building material prices, real demand and asset allocation needs.
Sinyi said it had sold all units at two residential complexes in New Taipei City’s Banciao District (板橋) and would recognize their profit next year.
However, Sinyi voiced concern that the central bank might introduce more measures to rein in the market after previous efforts have failed to achieve the intended effect.
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