The local real estate market will come under mounting pressure in the coming quarters, with confidence in property prices dropping to a new low in the third quarter, a survey by the Architecture and Building Research Institute found yesterday.
The survey’s composite index of confidence in property prices dropped to a low of 56 points last quarter — even lower than the 90-point level recorded during the SARS outbreak in 2003 and the lowest since early 2002 when the survey started, Chang Chin-oh (張金鶚), professor of land economics at National Chengchi University, told a media briefing yesterday.
“The worst is yet to come,” he said.
The expected market correction this year was delayed by the euphoria in the runup to and after the presidential election, he said, but fundamental concerns over a slowing economy are now weighing on the market.
Chang voiced his opposition to the government’s recent measures to stimulate the property market, saying this would only prevent the market from hitting the bottom and starting to recover.
“Only price cuts by construction companies can help the market return to health,” Chang said.
The survey also showed that the price confidence index in Taipei dipped to the lowest among all cities at 50 points.
With luxury houses in Taipei being cut by about a third in the past few months, Chang estimated that property prices in Taipei would fall further by 30 percent.
But the government’s recent bailout measures will likely give a helping hand to some home builders, who may resist any price cuts.
The survey found that 82 percent of respondents, or home buyers — up from 41 percent in the second quarter — said they expected the freefall in property prices to persist into the third quarter next year.
In addition to price cuts, Chang urged home builders to upgrade their before and after-sales services to attract buyers.
The survey also found that the central bank’s aggressive interest rate cuts drew mixed reactions from potential home buyers, with 48.5 percent of respondents saying they wouldn’t purchase a property simply because of lower short-term interest rates, Chang said.
The local property market continued to be a buyer’s market in the third quarter, with the room for price negotiations and the duration for closing deals widening, he said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS