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Buyers expect property prices to keep falling

“We’ve seen slowing sales since April, with a 10 percent to 20 percent decline monthly.”

— Jeffrey Huang, Evertrust Rehouse associate manager

The real-estate market is becoming a buyers’ market, with nearly 70 percent of home buyers expecting to see falling property prices over the next year, a survey released by Evertrust Rehouse (永慶房屋) showed.

“We believe property owners may face a 10 percent to 20 percent downward correction in their selling prices in order to close deals, since home buyers have turned even more pessimistic in the third quarter,” Yeh Lin-chi (葉凌棋), the housing broker’s president, told a media briefing yesterday.

Some 69 percent of the survey’s respondents in the third quarter said that they believe property prices would fall over the next three months — up from 37 percent of respondents in the previous quarter.

“That is the most pessimistic sentiment expressed by respondents to our survey since it was first conducted in late 2006,” Yeh said.

Some 66 percent of the respondents in the third quarter believed property prices would continue to drop over the next 12 months, up from 47 percent who thought so in the second quarter.

However, the survey also found that more buyers were hunting for bargains.

About 42 percent of respondents said the second half of the year would be a good time to buy property, up from 30 percent in the second quarter.

“The worst is over for the market, after sales declined the most in the second quarter,” Benson Liao (廖本勝), president of Evertrust Group (永慶集團), the parent company of Evertrust Rehouse, said at yesterday’s briefing. “But prices remain the key for closing deals now that more people are interested in buying.”

Liao said he believed there was a group of conservative long-term investors with cash who would be in a position to tap into the property market by bargain-hunting.

“I expect to see signs of property recovery in the fourth quarter,” he said.

But analysts are divided over when the declining property prices would bottom out.

It depends on when global financial markets stabilize and how much lower property prices can drop to attract buyers, Yeh said.

The buyer optimism that followed President Ma Ying-jeou’s (馬英九) election in March is completely gone.

“We’ve seen slowing sales since April, with a 10 percent to 20 percent decline monthly,” Jeffrey Huang (黃增福), the company’s associate manager, said yesterday, adding that “people have been over-optimistic about” the potential for Ma’s pro-China policies.
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