The real estate market recovery -- begun last year -- is continuing, with the index of leading indicators gaining 0.74 percent to 104.89 points in the second quarter, a government research institute said yesterday.
The index stood at 104.12 points in the first quarter.
While the real estate market climate score slightly dropped by one point to 13 in the second quarter, it continued to flash a "green" light for the fourth consecutive quarter, signifying steady growth, according to a report released yesterday by the Architecture and Building Research Institute under the Ministry of the Interior.
The survey also found, however, that more than half of industry players, including construction firms and real estate agents, are conservative about the outlook for the second half of this year, a researcher said at a press conference yesterday.
Aside from higher oil prices and other factors, expectations of an interest rate hike could have a real impact on supply and demand in the real-estate sector, said Peng Chien-wen (彭建文), an assistant professor in the department of real estate and built environment of National Taipei University.
The political impact of the year-end legislative elections also has the industry worried, he said.
The termination of the one-year extension of a 50-percent cut in the land-value increment tax next January and the government's decision not to provide more preferential mortgages for first-time home buyers once the current NT$300 billion fund is used up are both negative influences on the sector, Peng said.
"These factors are expected to linger and cloud the nation's property sector in the first quarter of next year," he said, adding that construction firms in the center of the country -- especially those in Taichung city and county, were most pessimistic about the market over the next two quarters.
Another industry veteran agreed with Peng's outlook, saying the market from the second quarter onwards next year could be less prosperous than this year, although there are still some hopeful signs.
"Skyrocketing oil prices could drive people to pour money into real estate, which is a better investment than stocks or other tools under such circumstances," said Victor Chang (張欣民), director of the research and development division of Sinyi Real Estate Inc (信義房屋), the nation's largest housing agent.
As long as the economic growth rate next year is more than 5 percent -- and given a good stock market performance and a decent inflation ratio of between 2 percent and 3 percent -- the market might remain robust next year, Chang said.
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