Mon, Jan 10, 2005 - Page 10 News List

House sales jump to record high

POLITICAL FACTOR Now that the legislative elections are over, the housing market seems to be rebounding, and a leading firm is predicting a full recovery for the industry

By Lisa Wang  /  STAFF REPORTER

Sales in the housing market roared to a record high last month due to seasonal factors and regained momentum with the easing in political unrest, real estate agents said.

Last month's legislative elections kept potential homebuyers on the sidelines in October and November, said Sinyi Real Estate Inc (信義房屋), Taiwan's biggest real estate firm, in its latest statement released over the weekend.

"The political factor did weigh on market sentiment. But quickly recovering transactions after the result [of the elections] show that demand is persisting," said Victor Chang (張欣民), the director of the research and development division of Sinyi Real Estate.

Housing sales rose by 26 percent last month compared with a year ago, which also brought 25 percent growth in transactions for the fourth quarter of last year, according to statistics compiled by Sinyi Real Estate.

Sinyi Real Estate did not provide specific transaction amounts.

"This significant growth indicates that Taiwan's housing market is on the right track for a full recovery," Chang said.

Looking ahead, Chang expects the momentum for growth to carry into the slack first quarter of this year as resilient sales climb further on the approaching expiry of a two-year, 50-percent concession on an incremental land tax.

Evertrust Rehouse Co (永慶房屋), however, said solid sales growth last month was limited to the north of the country, and helped by the tax concession.

However, sales in other parts of the nation, such as Kaohsiung in the south, remained tepid due to a sharp increase in the availability of new apartments, the housing agent said in a recent statement.

"We feel that momentum had regained slightly after the legislative elections ended. But overall, Taiwan's housing market still needs further boosts for a complete revival from the slowdown caused by the political factor," it said.

If the government settles on a decision to permanently cut 20 percent from the incremental land tax, then this, together with a fresh injection of preferential bank loans, may provide the real-estate market with that much-needed boost, Evertrust Rehouse said.

But the government can do virtually nothing to intervene in the market's pricing mechanism, determined by supply and demand.

The growing supply of houses is threatening to hurt prices and could therefore put an end to exuberant growth, housing agents warned.

Last year, housing construction companies unveiled pre-paid housing projects worth NT$161.2 billion, a 76-percent leap from 2003, according to Evertrust Rehouse.

"The big increase will be a real challenge for [construction firms] in sustaining housing prices," Evertrust Rehouse said.

The scale of pre-paid housing projects is seen as an indicator of price trends.

Sinyi Real Estate said a downtrend had emerged and blamed a significant growth in supply.

Housing prices slid for the second consecutive month in December to average NT$179,000 per ping, a 2 percent slide from NT$183,000 the previous month, according to the Sinyi Real Estate statement. That represents almost a 4 percent decline, compared to a peak of NT$186,000 in October.

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