Mon, Jan 12, 2009 - Page 12 News List

Intervention delays recovery: analysts

BIG DECLINES PREDICTED Real estate consultants said that they expected the prices of properties to go down by another 20 percent to 30 percent this year as the slump bites

By Crystal Hsu  /  STAFF REPORTER

As the Cabinet is slated to call a cross-ministerial discussion today on how to boost the housing market, analysts said yesterday that government intervention could delay recovery, adding that overpricing poses the biggest obstacle to property deals.

The Cabinet is to convene a meeting of economic, financial, interior and public works officials today to find solutions to the sluggish property market.

Major developers have urged the government to lower legal thresholds on Chinese investors acquiring properties here.

To that end, Cabinet financial authorities are considering measures that include extending the stay visa for Chinese investors that own Taiwanese properties from a month to six months, easing checks on their capital sources and simplifying their acquisition procedures.

Victor Chang (張欣民), a marketing consultant with Era Real Estate Taiwan (易而安不動產), said the proposed deregulation would be of little help as China was battling its own economic slowdown.

The giant emerging market is struggling to retain 7 percent to 8 percent GDP this year after posting a two-digit increase in most recent years.

“I wonder how many Chinese investors would opt to buy properties in Taiwan amid the economic downturn,” Chang said by telephone. “Property prices are expected to drop further this year, prompting potential buyers to stay on the sidelines.”

Chang urged the government to refrain from intervention to let the market hit bottom, which would help the market recover faster.

The series of stimulus measures, including interest rate cuts, have contributed to the tug of war between sellers and buyers, the consultant said, adding that he believed real estate prices would decline another 20 percent to 30 percent.

“Taiwan property prices sank 10 [percent] to 15 percent last year while their counterparts in Singapore plunged up to 40 percent,” Chang pointed out.

Stanley Su (蘇啟榮), senior researcher at Sinyi Realty Co (信義房屋), Taiwan’s only listed property broker, agreed.

Su said deregulation for Chinese investors was part of the effort to spur cross-strait trade rather than a housing market stimulant.

“Any stimulus [short of price falls] will fail to achieve its intended effect as long as the world is in recession,” Su said by telephone. “The government should allow the market to adjust prices on its own.”

Su said the rate cuts helped boost transactions among first-time buyers but believed property prices would drop another 10 percent to attract investors at home and across the strait.

James Tien (田大權), executive director of Voix Marketing Co (大聲公行銷), urged the government to focus on improving infrastructure facilities if it means revitalizing the housing market.

“The sluggish market shows an imbalance between supply and demand,” Tien said by telephone. “It is time the unfit exit the market, which will regulate itself.”

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