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Public confidence in the housing market soars in Q4

Although residential housing prices continue to go up, public confidence in the real estate sector last quarter rose to its highest level in nearly two years due to strong optimism expressed by people in central and southern Taiwan, according to a government report released yesterday.

The composite index of confidence in housing prices advanced 7.79 points from the third quarter to 110.27, a big jump from the 99.15 recorded a year ago, the Council for Economic Planning and Development said in the report.

"The housing market in the north has always been hotter than that in the south," said Chang Chin-oh (張金鶚), professor of land economics at National Chengchi University who conducted the report.

"Now the south is gradually picking up, which is a good thing," Chang said.

In Taipei, house hunters still have to shoulder a heavy burden as they need to save 8.8 years without spending a penny to buy a house, higher than the national average of 6.6 years.

The report found that more tenants said that they would continue to rent and delay their purchase of a house, indicating that housing prices might have risen too far.

Chang warned that investors and those seeking to buy houses for themselves should take a cautious and conservative attitude as no one knows whether or not the real estate sector would overheat this year.

He also expressed concern about financial institutions' lax standards when granting mortgages.

After consumer credit defaults dealt a heavy blow to banks' consumer finance businesses last year, banks have turned to the mortgage market.

However, the great number of investors pushing up housing prices could lead to a housing bubble, especially in Taipei City.

The survey was conducted by polling people who have recently bought houses or those who were looking to buy houses from Jan. 1 to Jan. 15 this year. The survey had 2,079 respondents.
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