Fri, Feb 13, 2009 - Page 12 News List

Majority of real estate seekers hesitate on price

By Crystal Hsu  /  STAFF REPORTER

A survey by a major real estate agency yesterday showed that a majority of people were interested in buying property, but they hesitated to act on expectations of falling prices amid the economic downturn.

However, real estate brokers warned against interpreting the findings as signs of recovery, saying the property market would remain bearish until next year and that the stand-off between sellers and buyers over property prices would persist unabated.

The survey, conducted by Evertrust Rehouse Group (永慶房仲集團), found that 54 percent of the respondents were willing to enter the property market, up 12 percent from last quarter.

Evertrust Rehouse senior manager Yeh Lin-chi (葉凌棋) attributed the improved sentiment to a series of interest rate cuts by the central bank to stimulate domestic consumption. The re-discount rate stands at 1.5 percent, from 3.625 percent last September. Lenders have lowered mortgage rates by different sizes.

“An increasing number of people are checking out houses for sale these days,” Yeh told a press conference. “The sentiment appears less gloomy, though few close deals in anticipation of lower prices.”

By contrast, 37 percent of the respondents said it would be unwise to invest in real estate over the coming six months, down from 45 percent a quarter earlier, the survey said, adding that the remaining 8 percent said they had no idea.

The poll, which questioned 1,673 people online between Jan. 11 and Jan. 19, had a margin error of minus and positive 2.39 percent.

In addition, 56 percent said they believed property prices would drop in the next three months, the survey showed.

Yeh cited the figure as saying there was no shortage of funds, but transactions would not pick up significantly unless sellers were willing to cut prices.

Chuang Meng-han (莊孟翰), a professor of industrial economics at Tamkang University, put forth a bleak forecast, saying the price adjustment may take two to three years during which the chance of a recovery was slim.

Chuang said financial turmoil has made investors more rational and fewer people would now rush to buy real estate on low interest rates or tax cuts.

“Nothing short of a price fall can effectively thaw the buying freeze,” Chuang said.

Sinyi Real Estate Inc (信義房屋), seeking to ease the stalemate, on Wednesday launched a “good buy” program after persuading clients to lower prices by 8 percent.

The nation’s only listed real estate brokerage said some 70 percent of its clients had agreed to cut prices on more than 10,000 properties.

Sinyi projected the price cut would boost transactions by 10 percent and facilitate the end of the downturn.

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