The long-depressed property market is showing signs of recovery, though the big amount of vacant houses continue to be a damper, according to a report on the second quarter's real-estate performance released yesterday.
The report, prepared by the Architecture & Building Research Institute under the Ministry of the Interior, said the property market has completely bottomed out in the second quarter and is expected to show a slow upturn in the next two quarters.
"The real-estate market is surely moving up but is not as strong as has been expected, since there are still plenty of vacant properties available," the institute's director-general Hsiao Chiang-pi (
Compared to the first quarter, the nation's index of leading property indicators increased by 1.91 percent to 103 points in the second quarter. Property prices in central and southern Taiwan continue to decline, however, which slightly dragged down the composite index by 0.43 percent to 95.28 points, according to the report.
The government's construction licenses grants to land developers in the second quarter rose by 11.65 percent from the previous quarter, while that of operation licenses issued upon completion of buildings rose by 4.64 percent, according to government statistics.
But the improvement in the property sector may be short-lived if property developers continue launching new projects, an economist warned yesterday.
"We're cautiously optimistic about the property market's expected recovery in the third and fourth quarters," said Chang Chin-oh (張金顎), a land economics professor at National Chengchi University.
He urged the nation's construction developers to be patient and refrain from hastily launching housing projects and so oversupply the market.
"The property market in Taipei is steadily turning upward but the markets in central and southern Taiwan remain stagnant," Chang said.
He also suggested to potential buyers not to rush to make down payments on planned properties.
"It's irrational," he said.
Even so, the institute's report is a sign of recovery in the property sector, which should reach full recovery in the second quarter of next year after the presidential elections, Chang said.
Referring to a survey conducted by the institute in August, Chang said the poll found that real-estate developers' and the public's confidence in the local property market performance for the second half of this year is gaining stronger momentum than the market's actual performance.
Over 54 percent of the polled companies in the real-estate sector, including construction firms, brokers and land appraisers, expressed confidence in the market's recovery in the third and fourth quarters while also expecting a hike in property prices, Chang said.
The expected property recovery will subsist on the nation's improving economic fundamentals, he said.
Chang disagreed with a market concern that the local property market may be marginalized after the government opens up direct links between Taiwan and China.
He said that the links are expected to ease cross-strait tensions and facilitate cross-strait business exchange, which would be advantageous to strengthen the nation's economic fundamentals.
"Improving economic fundamentals are always good news to the property market," he said.
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