Buying houses during "Ghost Month" is usually deemed taboo, but this custom seems to be losing strength with consumption patterns and behavior apparently changing, according to the Taichung-based real estate developer Shining Group (鄉林集團).
"Data collected over the past weekend showed that transaction volumes didn't slip although the number of customers visiting upscale housing projects did drop about 10 percent," company chairman Lai Cheng-i (賴正鎰) said during a press conference yesterday.
Lai contended that the "impact [of the taboo] should be small on the sector." Rather, he thought that the growing difficulty in acquiring land would be the major reason behind the shrinking volume of housing projects offered this year.
Pre-sale properties offered nationwide during the second quarter totaled NT$199.73 billion (US$6.1 billion), down 10.1 percent from the first quarter and 20.5 percent from a year ago, Shining's figures showed.
Taichung County posted the largest quarter-on-quarter growth of 97.6 percent. In contrast, Taoyuan County saw second-quarter sales fall 65.9 percent, affected in part by the high volume of pre-sale housing projects offered by neighboring Linkou (林口) and Sanhsia (三峽) in Taipei County, Lai said.
The volume for the whole year was expected to fall between NT$810 billion and NT$860 billion, contracting by 5 to 10 percent from last year, he said.
However, customers should prepare to pay more as housing prices would continue to rise at an annual rate of 8 percent to 10 percent because of surging raw material costs, skyrocketing land prices and changes in construction regulations, Lai said.
The new regulations mandate that buildings higher than eight stories be equipped with two emergency staircases and one negative pressure smoke vent room. These would raise the ratio of common areas to total floor space from 27 percent to 28 percent to 32 percent to 34 percent, adding more financial pressure on homebuyers.
Shining Group also said that the number of buyers who purchase houses for investment was on the rise with Taichung recording the largest annual growth of 34.71 percent in the second quarter.
Pinning hopes on the opening of direct links and Chinese tourist arrivals increasing, Lai said housing prices should have room to surge by 30 percent to 50 percent if chartered flights could be launched before the year-end.
Meanwhile, Victor Chang (張欣 民), a director at the research and development division of Sinyi Real Estate Inc (
Chang added, however, that direct links would, at the earliest, only be initiated after the presidential election in 2008.
"At that time, the housing market will get a big boost from strong external demand. Before that happens, prices will still be decided by the forces of supply and demand," Chang said.