The high number of construction permits and building use licenses issued by the government last year reflects not only a robust property market, but also an abundant supply, which could translate into selling pressure in a correction period, analysts said.
Construction permits across the nation increased 6.5 percent to 169,651, the highest in 26 years, while building use licenses rose by 6,600 to a 12-year high of 104,000, data released on Wednesday by the Ministry of the Interior showed.
Construction permits reflect confidence on the supply side, Great Home Realty Co (大家房屋) head researcher Mandy Lang (郎美囡) said, adding that a robust economy and monetary easing motivated developers to launch projects in first and second-tier locations.
Photo: Peter Lo, Taipei Times
Of the six special municipalities, Tainan reported the biggest increase in construction permits at 34.5 percent, followed by 28 percent in Kaohsiung, 16.3 percent in Taipei and 4.9 percent in Taoyuan, ministry data showed.
Urban renewal projects were the growth driver in Taipei, Lang said.
Bucking the trend, construction permits fell 11.1 percent in New Taipei City and 4.1 percent in Taichung, ministry data showed.
Building fever spread to other parts of Taiwan, with the number of construction permits rising 76.1 percent in Pingtung County, and nearly 50 percent in Yilan and Miaoli counties, the data showed.
However, soaring building material costs and several waves of credit controls have prompted some developers and contractors to postpone the construction of presale projects, H&B Realty Co (住商不動產) senior research manager Jessica Hsu (徐佳馨) said.
The rise in costs and credit controls could hurt projects with slack sales and weak financials, Hsu said, advising people to evaluate developer capital before buying.
Building use licenses last year shot up in New Taipei City, Taoyuan and Tainan, as presale projects were completed, the ministry said, adding that the increase was most evident in Tainan, where licenses rose 70 percent.
Building use licenses more than doubled in Hualien County, while rising 82 percent in Yilan County and 35 percent in Nantou County.
The sharp rise had much to do with low bases of comparison, while the COVID-19 pandemic boosted the popularity of residences in scenic eastern Taiwan, Hsu said.
Global Living Intelligence (全球居不動產) said the government has pushed developers to start construction on acquired land lots to curb land hoarding, which is likely to drive up the number of permits and the housing supply, a twist that could signal selling pressure.
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