Presale projects and newly completed houses last quarter declined 2.8 percent from a year earlier to NT$273.29 billion (US$9.42 billion), despite stable sales, as the market is assimilating to unfavorable policy measures, the Chinese-language Housing Monthly (住展雜誌) said yesterday.
The NT$8 billion retreat came as a surprise to explosive growth expectations previously fueled by intensive land plot sales and building permit issuances, the magazine said.
The disappointing result was likely due to a shift in sentiment after the central bank last month raised interest rates by 50 basis points and the Cabinet is pushing a bill to ban transfers of presale housing contracts, Housing Monthly research manager Ho Shih-chang (何世昌) said, adding that soaring construction costs and labor shortages delayed product launches.
Photo: Hsu Yi-ping, Taipei Times
Highwealth Construction Corp (興富發) founder Cheng Chin-tien (鄭欽天) said that construction costs in central and southern Taiwan surged by nearly 80 percent from NT$70,000 per ping (3.3m2) to NT$160,000 per ping, significantly squeezing profit margins for builders.
It is more cost-efficient for his company to default on presale contracts than press ahead with construction, Cheng said.
Capacity expansions by high-tech firms and the development of renewable energy sources contributed to labor shortages and building material price increases, adding to geopolitical tensions abroad, he said.
New Taipei City bucked the downward trend with a 10 percent gain in presale project volume, which amounted to NT$120 billion, driven by rezoning in Sinjhuang District (新莊), the magazine said.
New Taipei City’s Sindian (新店), Banciao (板橋), Sanchong (三重), Linkou (林口) and Tamsui (淡水) districts were relatively quiet last quarter, as developers postponed product releases to the sales season beginning on May 20 to allow the market more time to digest policy changes, Ho said.
Presale projects in Taipei totaled about NT$70 billion, mostly concentrated in Beitou (北投) and Neihu (內湖) districts, the magazine said, attributing the trend to more plots being available in suburban districts than in more central ones.
Presale projects in Taoyuan held steady at about NT$50 billion, as major projects failed to join the market, Ho said.
Developers in Hsinchu also remained bearish with presale projects dwindling more than 30 percent to NT$27.6 billion, it said.
Presale housing plunged 88.64 percent in Keelung and dropped 20.86 percent in Yilan, due mainly to high bases in the previous quarter, Ho said, adding that the areas’ smaller markets tend to be more volatile.
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