The nation's housing market grew in the third quarter at the slowest pace for the past five quarters, as home buyers hesitated to splurge on such luxurious items after natural disasters devastated the island, according to the latest report from Taiwan's top housing agent.
"Floods brought by a series of typhoons, including Typhoon Aere in August, have aggravated the situation in the slack third quarter and got in the way of a solid rebound from the industry's decade-long recession," Victor Chang (張欣民), director of the research and development division at Sinyi Real Estate Inc (信義房屋) said yesterday.
The housing market is usually considered a gauge of people's purchasing power and therefore is considered one of the primary indicators of the trend of an economy.
In the three months to September, Taiwan's housing price index rose by 1.45 percent to 99.95 points from 98.52 points three months ago, according to the latest report released by Sinyi Real Estate over the weekend.
Prices for apartments in the Taipei area, which suffered the brunt of floods, inched up a mere 0.96 percent quarter-on-quarter.
In southern Taiwan, several buildings near the construction site of a mass transportation system in Kaohsiung collapsed and have scared away home buyers, he said, adding that prices in the area plunged after the incidents.
But, Chang believed the real-estate market will clear up in the final quarter, as worries about escalating inflation caused by the surging crude oil prices would boost property buying, as a means of leverage against local currency depreciation.
Also, Taiwanese people tend to buy houses prior to the Chinese New Year, which conventionally makes the fourth quarter a high season for the industry, Chang said.
As a result, housing sales, excluding commercial space, are expected to climb by two percent or three percent during the October-December period, from the previous quarter, he said.
He played down the impact on housing purchases of the legislative elections in December, saying voters now are becoming more rational about political events, compared to the enthusiasm before.
The government's leading property research institute, however, expressed a more cautious view about the real-estate market in the second half, based on a survey it released early this month.
According to the survey released by the Architecture and Building Research Institute under the Ministry of the Interior, rising borrowing costs after the central government raised interest rates by 0.25 of a percentage point, and a lack of new incentives after the NT$300 billion worth of preferential bank loans for first-time home buyers runs out next year, are two major factors preventing people from buying houses, experts with the agency said.
President Chen Shui-bian (
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