Property companies remain upbeat about housing market
CNATAIPEI--Local property developers and sales agencies said Saturday that they are upbeat about the housing market despite growing concerns that the central bank will raise its key interest rates in the fourth quarter.
September 29, 2013, 12:03 am TWN
The property companies said they still have high hopes that an ongoing sales campaign will spark strong buying interest, as construction companies have launched several new residential property projects in September.
Lai Cheng-yi, chairman of Shining Building Business Co., said the markets at home and abroad remain awash in liquidity in the wake of the U.S. Federal Reserve's surprise decision in mid-September to continue its monthly US$85 billion bond buying program.
Shrugging off concerns about a possible interest rate hike by the local central bank, Lai said the high market liquidity will continue to serve as a force to push local home sales higher in the September campaign.
September is usually one of the peak periods for property sales campaigns in Taiwan, with developers unveiling new projects that they hope will contribute significantly to their annual sales.
In the housing market in northern Taiwan, property developers have launched NT$179.4 billion (US$6.06 billion) worth of residential property projects. It is second biggest amount in five years, following NT$218.9 billion in September 2012, according to My Housing magazine.
The housing market in northern Taiwan is seen as an important indicator of sales in the country's property market.
Taiwan's Central Bank Governor Perng Fai-nan on Thursday urged people to be alert to the risks of rising borrowing costs as low interest rates cannot be expected to last forever.
Perng's comments sparked panic selling in local property stocks on the Taiwan Stock Exchange Friday, on fears that the central bank will raise its interest rates as early as the fourth quarter after retaining the same rates for nine quarters in a row.
Lin Chao-chang, a manager at the local real estate agency Sinyi Realty Inc., said the central bank is unlikely to push its interest rates too high or too quickly.
The September sales campaign can be expected to boost property developers' revenue for the whole fourth quarter, particularly in light of their efforts to introduce new products to home buyers, he said.
He also said that although some lawmakers are pushing for revision of the luxury tax to tighten restrictions on housing sales, there is little chance of market sentiment being affected immediately, given the ongoing standoff in the Legislative Yuan.
Farglory Land Development Co. Chairman Chao Teng-hsiung said he has faith in the quality of his company's property projects.
As long as the company's products are competitive in the market, he said, he has no worries over sales being affected by rising borrowing costs or a tighter luxury tax.