As consumer confidence in the housing market slumps to a record low, the economic slowdown may put a sizable number of real estate brokers out of work as a rebound in the property market is unlikely in the second half, if not impossible, pundits cautioned yesterday.
Lee Tung-rong (李同榮), chairman of the Taipei Association of Real Estate Brokers (台北市房仲公會), said there were about 5,000 real estate brokerage outlets nationwide and the number may drop to 4,000, given the falling number of deals in the first half and a drab outlook for the rest of the year.
For the first time in six years, the number of real estate transactions declined 9.1 percent to 195,700 deals in the first six months, compared with 210,374 a year ago, Lee said.
Lee said it is only a matter of time before some brokers exit the market, either of their own accord or because they are forced to.
“The thin trading makes downsizing and other cost-saving measures necessary for real estate agencies to cut their losses and stay afloat,” Lee told reporters.
On Tuesday, the Institute for Physical Planning and Information (國土規劃及不動產資訊中心) said confidence levels among prospective home buyers in Taipei dived to 65.79 points in the second quarter, the lowest since the institute started the survey in May 2003.
Billy Yen (顏炳立), general manager of DTZ Debenham Tie Leung International Property Advisers (戴德梁行), was also gloomy, saying the property market would still be overcrowded with 4,000 real estate brokerage outlets.
Yen said that it costs about NT$400,000 (US$12,700) a month to maintain an outlet, meaning each outlet needs to complete NT$100 million in deals.
“The goal is untenable for many outlets, with speculators opting to exit on thin profit margins and potential buyers expecting property prices to fall in the coming months,” Yen said by telephone.
The commercial property market was particularly bearish in the first half, with volume dropping 50 percent year-on-year on concerns over rising inflation and interest rates eroding profit margins, DTZ said in a report last month.
Lee and Yen agreed reckless expansion on the part of real estate agencies was also to blame for the overcrowding in the marketplace.
Lee noted that the number of brokerage outlets stood at 2,800 in 2002 and had nearly doubled as at the end of last year.
“The supply of brokers appears to have exceeded demand,” Lee said.
Yen echoed the observation, saying firms with liquidity pressures would opt out first.
SEMICONDUCTORS: The firm has already completed one fab, which is to begin mass producing 2-nanomater chips next year, while two others are under construction Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, plans to begin construction of its fourth and fifth wafer fabs in Kaohsiung next year, targeting the development of high-end processes. The two facilities — P4 and P5 — are part of TSMC’s production expansion program, which aims to build five fabs in Kaohsiung. TSMC facility division vice president Arthur Chuang (莊子壽) on Thursday said that the five facilities are expected to create 8,000 jobs. To respond to the fast-changing global semiconductor industry and escalating international competition, TSMC said it has to keep growing by expanding its production footprints. The P4 and P5
DOWNFALL: The Singapore-based oil magnate Lim Oon Kuin was accused of hiding US$800 million in losses and leaving 20 banks with substantial liabilities Former tycoon Lim Oon Kuin (林恩強) has been declared bankrupt in Singapore, following the collapse of his oil trading empire. The name of the founder of Hin Leong Trading Pte Ltd (興隆貿易) and his children Lim Huey Ching (林慧清) and Lim Chee Meng (林志朋) were listed as having been issued a bankruptcy order on Dec. 19, the government gazette showed. The younger Lims were directors at the company. Leow Quek Shiong and Seah Roh Lin of BDO Advisory Pte Ltd are the trustees, according to the gazette. At its peak, Hin Leong traded a range of oil products, made lubricants and operated loading
The growing popularity of Chinese sport utility vehicles and pickup trucks has shaken up Mexico’s luxury car market, hitting sales of traditionally dominant brands such as Mercedes-Benz and BMW. Mexicans are increasingly switching from traditionally dominant sedans to Chinese vehicles due to a combination of comfort, technology and price, industry experts say. It is no small feat in a country home to factories of foreign brands such as Audi and BMW, and where until a few years ago imported Chinese cars were stigmatized, as in other parts of the world. The high-end segment of the market registered a sales drop
Citigroup Inc and Bank of America Corp said they are leaving a global climate-banking group, becoming the latest Wall Street lenders to exit the coalition in the past month. In a statement, Citigroup said while it remains committed to achieving net zero emissions, it is exiting the Net-Zero Banking Alliance (NZBA). Bank of America said separately on Tuesday that it is also leaving NZBA, adding that it would continue to work with clients on reducing greenhouse gas emissions. The banks’ departure from NZBA follows Goldman Sachs Group Inc and Wells Fargo & Co. The largest US financial institutions are under increasing pressure
RSS