By Crystal Hsu
Housing consumer confidence slumped to a record low level in the second quarter as many potential home buyers opted to stay on the sidelines on expectations real estate prices will decline in the second half and beyond, a survey released yesterday found.
The survey, conducted by the Institute for Physical Planning and Information (國土規劃及不動產資訊中心), showed confidence levels among prospective home buyers in Taipei dived to 65.79 points in the second quarter, from 129.47 points in the first quarter.
Chang Chin-oh (張金鶚), land economics professor at National Chengchi University, who briefed the media of the survey result, attributed the trend to the stock market’s sluggish performance as well as a moderating economy.
Chang said the stock market, which dropped 6.64 percentage points last month, appeared to have a negative impact on the housing sector as the survey showed capital gains constituted 3.8 percent of their down payments.
Nationwide, property consumer confidence stood at 90 points for the second quarter, the survey said, adding that the number fell to 80 points in terms of confidence for the near future.
A score of 100 is considered neutral and lower scores indicate respondents are pessimistic.
“The figures indicated potential buyers believed real estate properties are overpriced and they would rather adopt a wait-and-see attitude before entering any deals,” Chang said.
The fact that the economic expansion slowed also contributed to bearish outlooks, Chang said.
Last Friday, the Directorate General of Budget, Accounting and Statistics lowered its GDP growth forecast from 4.78 percent to 4.3 percent for this year on falling domestic and foreign demand and rising fuel and raw material costs.
The projected GDP growth would drop to 3.85 percent if the government had not introduced the special spending program of NT$130 billion (US$4.3 billion) that is expected to boost the GDP by 0.45 percentage points in the second half.
The inflationary pressures sent mixed messages to the housing market as 44 percent of the respondents said they were positive variables but another 40 percent said they would dent potential buyers’ willingness, the survey showed.
Inflation, however, prompted home buyers to lower their housing budgets, with 43 percent of the transactions priced between NT$3 million and NT$6 million in the second quarter, Chang said, adding that another 31 percent ranged from NT$6 million to NT$9 million.
Meanwhile, he said 36 percent of owners described their houses as heavy financial burdens, with respondents in the capital city reporting the greatest pressure at 2.38 points from a spectrum of between 0 and 4.
Housing rent, on the other hand, is expected to hike in the near future as 45 percent of the respondents said they can not afford to own houses.
The survey had a sample of 2,108 people in real estate agencies and banking institutions who responded to questionnaires sent between July 1 and July 15.
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