Lawmakers should attach clauses that would permit loss-making transfers among joint buyers for loan arrangement reasons to an amendment to the Equalization of Land Rights Act (平均地權條例) that aims to clamp down on speculative buying in the property market, Shin Ruenn Construction Co (新潤機構) chairman Ben Huang (黃文辰) said yesterday.
Huang, who is also vice chairman of the New Taipei City Real Estate Development Association, told a news conference that it is odd that the amendment would subject property purchases by legal entities to prior approval, as it would contravene free market principles.
The bans could dampen buying interest and stretch transaction periods, but are unlikely to trigger substantial price corrections given spikes in land, building materials and labor costs, Huang said.
Photo: Chen Yung-chi, Taipei Times
“Shin Ruenn would stand by its construction schedule despite economic uncertainty and unfavorable legislation,” he said.
Developers and builders would defend the 20 percent profit margin if 25 percent gains turn out to be unfeasible, Huang said.
Developers would price their projects more reasonably, rather than engage in price concessions to facilitate deals, he said.
A flat market is also favorable for developers that seek to build land stock, he said, adding that land prices have been unreasonably high in recent years.
The company said its affiliated Shin Ruenn Development Co (新潤興業) is to post NT$35.5 billion (US$1.16 billion) in profit over the next four years in line with a sustainable business strategy, and it expects the ongoing economic slowdown to make property prices more reasonable next year.
The Taipei-based developer is due to recognize profit from joint ventures at two pre-sale projects, Good Life of Metro Heart I and II in Taoyuan’s Luzhu District (蘆竹), Shin Ruenn Development chairman Kuo Chang-geng (郭長庚) said.
The projects near the Taoyuan International Airport MRT Line have sold out, and Shin Ruenn Development could divide a profit of NT$1.23 billion upon their completion next year, Kuo said.
The company has sold 99 percent of the Shin Ruenn double complex in New Taipei City’s Linkou District (林口) and posted a 94 percent sales rate for the Manor House in Taoyuan’s Dayuan District (大園), he said.
The developer has participated in the development of Fancy World in New Taipei City’s Tamsui District (淡水) and Sky Forest in Taipei’s Nangang District (南港).
Those projects have sales rates of more than 80 percent, which meant the company has divided NT$930 million and NT$5.22 billion for each, Kuo said.
Sales rates of more than 50 percent give developers and builders confidence to continue with construction without worrying over cash flow, profitability and other issues, Huang said.
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