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Updated Friday, April 29, 2011 11:48 pm TWN, The China Post news staff

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Value of new housing projects in north drops 60 percent: firm

The total value of new housing projects launched in northern Taiwan from March 1 to April 30, the annual peak trading period for the domestic realty market, plunged 60 percent from the original projection of NT$261.6 billion to only NT$105 billion, almost the same level seen during the global financial crisis, according to statistics compiled by My Housing Magazine.

Ni Zi-jen, the R&D division chief of My Housing Magazine, attributed the plunge to local construction firms halting the launch of new construction projects due to the introduction of the luxury tax, which was designed to dampen speculative realty transactions. The new tax bill was ratified by the Legislative Yuan on April 14, just a couple of weeks after it was drafted by the Ministry of Finance.

Ni said that in mid-February, the total value of new construction projects planned to be launched during the March 1-April 30 period hit a 10-year high of over NT$261 billion, due mainly to the mayoral election results in the five municipalities being the same as widely expected, the favorable effects of the economic cooperation framework agreement (ECFA), and the policy of allowing Chinese tourists to make free, self-guided trips to Taiwan.

But after the luxury tax bill came to light in late February, it dealt a heavy blow to the launch of new house construction projects in northern Taiwan.

Statistics showed that there were originally a total of 53 new construction projects, valued at NT$1 billion each, scheduled to be launched during period, with 13 of them valued at over NT$5 billion each.

But as of yesterday, only 26 new construction projects valued at over NT$1 billion have been launched, reaching a total of just NT$72.5 billion.

In Taipei City, for instance, quite a few major construction projects in Daan, Songshan, Zhongshan, Neihu and Beitou districts weren't launched in March and April although they were originally slated to have been.

In New Taipei City, the Xinzhuang District five major housing construction projects, scheduled to be made available for presale to potential home buyers, were postponed.

Meanwhile, Ni said that the impact of the luxury tax on the housing prices will gradually decline as time passes. He predicted that housing prices in New Taipei would decline by around 10 percent, and those in New Taipei City would drop by 10-15 percent by the end of June.

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