Consumers are turning even more pessimistic about the local property market, with the majority cutting back their budget for future homes, a local realtor’s survey found yesterday.
The survey by Evertrust Rehouse (永慶房屋) showed that 70 percent of respondents would not spend as much as they had planned on new houses.
More than 60 percent of respondents nationwide said they could only afford two to three-bedroom apartments that cost between NT$2 million (US$60,300) and NT$8 million.
This meant potential home buyers may have slashed some NT$2 million off their budget, Jeffrey Huang (黃增福), an assistant manager at the company’s research and development department, said yesterday.
The survey also showed that buyers in Taipei had lowered their housing budget to between 6 million and NT$8 million, down from their previous budget of between NT$8 million and NT$10 million, Huang said.
“The gloomier economic outlook has scared many home buyers, who are now only willing to close deals at a 20 percent to 30 percent discount,” Huang said.
This compares with previous discounts of 10 percent to 15 percent, he said.
The luxury home market has also been hit, with sales contracting and prices declining by up to 20 percent, he said.
Some 50 percent of respondents, however, agreed that now was a good time to bargain hunt, while 46 percent said they would continue to wait and see.
Huang advised long-term mortgage borrowers, however, to exercise caution in response to a recent central bank move encouraging 11 local banks to adjust their mortgage rates on a monthly instead of quarterly or longer bases.
Huang said he believed interest rates would eventually go back up, which would put borrowers with contract terms longer than two years at a disadvantage if banks were to permanently fix the rate adjustment on a monthly basis.
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