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Property market recovery losing momentum: report

The nation's property market, which began recovering in the first quarter after a decade-long slump, showed signs of flattening out in the third quarter, according to a report issued by Cathay Real Estate Development Co (國泰建設).

But the outlook for the market's long-term prosperity remains unchanged, it added.

"The nation's average property prices slightly climbed in the third quarter, in spite of a decline in sales," Hua Ching-chun (花敬群), co-author of the report said at a press briefing.

Hua, chair of Hsuan Chuang University's department of public affairs management, attributed the slowdown in sales last quarter to the withdrawal of property investors, who might have hesitated to invest as a result of economic uncertainty.

According to the report, property prices, on average, rose 2.5 percent in the third quarter while sales dropped by 22 percent -- on account of property oversupply in previous quarters.

Growth momentum in Taipei's property market is steady, with prices rising and new projects continuing to be launched, the report said.

The residential market in central Taiwan showed the best regional performance, with sales posting steady growth, while properties in southern Taiwan were less desirable with sales declining by a significant 47 percent from one quarter earlier.

"The downturn in sales in the third quarter will be of great concern to the market's performance in the next few quarters," Hua said.

In the fourth quarter the property market, may not perform too well, however, as political uncertainties surrounding the election in December, a recent increase in oil prices and rising interest rates may drive investors to return to a wait-and-see posture, the professor said.

The long-term sustainability of the recovery in the property market depends on whether developers launch new housing projects, he added.
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