The Cabinet's recent decision to extend its preferential-mortgage policy with a budget of NT$280 billion is expected to stimulate real-estate transactions in the next few months, market analysts said yesterday.
"The property market may see a 10 percent to 20 percent growth of transactions in the second half of the year following the loan extension," said Armon Lin (林永孟), a manager with Sinyi Real Estate Inc (信義房屋).
According to Lin, 157,000 houses were sold in the first six months of the year despite the SARS epidemic in the second quarter.
Sinyi expects to see an increase of 15,700 to 31,400 deals in the second half of this year.
The government's past stimulus policies -- interest-rate cuts or preferential loans -- have boosted property sales by, on average, 13.6 percent in the month and 48.3 percent in two months after the policies were announced, Lin added.
He said loans with interest rates as low as 2.3 percent will continue to motivate tenants to look for homes of their own as monthly mortgage payments are now lower than rents.
In addition to low interest rates, the government's earlier decision to permanently cut the incremental land-value tax by up to half may also motivate some home-owners to change hands so as to take advantage of the preferential loan rate.
Sharing a similar view, Billy Yen (
"The market's shopping spree has gradually picked up from early this year," Yen said.
But the buying is as a result of low interest rates and low property prices, he said, adding that signs of a sustainable property market recovery are not strong yet.
Chang Chin-oh (
All three experts agreed there is little room for property prices to rise in the next few months, meaning returns won't be strong enough for property investors to plunk down cash.
"Property prices have stopped bleeding and stabilized in the northern Taiwan in particular," Chang added.
Chang believes property prices are on an upward trend although the upcoming elections may pose uncertainties.
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