The nation's sizzling real estate market is expected to decline gradually from the current quarter through the next quarter, according to a report released by the Architecture and Building Research Institute yesterday.
The institute under the Ministry of the Interior said the composite index measuring the housing market was 12 points for the first quarter, the same level as for the previous quarter that flashed a green light.
Despite the stable outlook for the first quarter, the leading index, however, slid by 0.74 percent from the previous quarter, a sign of the market becoming weaker, Ho Ming-jing (何明錦), director-general of the institute, said at a press briefing.
The report coincided with a survey conducted last month by the institute on construction companies, real-estate brokers, financial institutions and industry-related companies, in which 26.77 percent of the polled expressed a negative sentiment to the market outlook for the current quarter, with the figure increasing to 35.71 percent for the next quarter.
Meanwhile, only 18.90 percent of those polled said they were positive about the market in the current quarter, with 23.81 percent of them showing optimism for the next quarter, according to the survey.
Rising construction and labor costs and oversupply were cited as the major reasons for the pessimism, the survey showed. Political instability and rising interest rates which are likely to dampen buying were also affecting the market, the survey said.
Nevertheless, Ho said there were still positive factors to bolster the market, including easing cross-strait relations, the upcoming opening up of the nation to Chinese tourists and the launch of the high-speed railway in October.
This upbeat sentiment is evident in the rising stock prices of construction companies.
Shares of Huaku Construction Co (華固建設), for instance, increased 3.18 percent to close at NT$64.8 on the Taiwan Stock Exchange yesterday. Stock has jumped by over 70 percent in the past three months, as Huaku has reported significant sales from two residential projects in Taipei City.
Shares of another leading constructor Chong Hong Construction Co (