Property stocks decline amid fears of price curbs
April 19, 2014, 12:17 am TWN
TAIPEI -- Local property stocks underperformed against the broader market Friday to close down amid fears that Taipei was developing new measures to curb the constant climb of housing prices in the city, dealers said.
Selling was sparked by local media reports that the Taipei City Government is looking to raise the housing tax on residential properties not lived in by their owners, a bid to lessen speculation and dampen investors' appetites for hoarding homes, they said.
The construction sub-index closed down 0.28 percent at 310.76 points, while the weighted index on the Taiwan Stock Exchanged ended 0.25 percent higher at 8,966.66 points.
Among the falling property stocks, shares of large-sized property developer Huaku Development Co. shed 1.13 percent to close at NT$78.70 (US$2.61) with 2.10 million shares changing hands.
Shares of mid-sized developer YeaShin International Development Co. (亞昕國際) shed 1.51 percent to end at NT$22.80, while rival Howarm Construction Co. (和旺建設) lost 1.12 percent to close at NT$26.50.
The property sector opened higher in line with the broader market, which hit 9,000 points at one point on leads by the bellwether electronics sector. But selling set in to drag down property stocks as investors were swayed by the news that Taipei could cap home prices, dealers said.
According to the local media reports, Taipei Deputy Mayor Chang Chin-oh (張金鶚) and Finance Minister Chang Sheng-ford (張盛和) are scheduled to meet next week to discuss the issue.
The deputy mayor has long been seen as an advocate for reining in housing prices to prevent a real estate bubble and make the market healthier.
The two officials are reportedly likely to agree to raising housing tax on unused properties to 2 percent from the current 1.2 percent, a move which could prompt investors to lower their holdings of properties.
Although the government introduced a luxury tax amid a series of measures to curb an increase in housing prices, particularly in Taipei, prices have continued to rise, dealers said.
Dealers said as demand in Taipei remains strong, unless the city's property market suffers a supply glut, the housing tax hike could yield few effects.