Housing consumer confidence plunged to a historic low in the fourth quarter of last year as potential home buyers hesitated to enter the housing market on the expectation that prices will fall further, a poll released yesterday found.
The survey, conducted by the Institute for Physical Planning and Information (國土規劃及不動產資訊中心), showed confidence levels among prospective home buyers dropped 5.68 points from the previous quarter to 50.06 points, the lowest level since the body initiated the survey in the second quarter of 2002.
Consumers were also pessimistic about the nation’s property outlook after reflecting on the confidence gauge, which gained 2.68 points to 52.74 points, the organization’s latest survey said. A score of 100 is considered neutral and lower scores indicate respondents are pessimistic.
Chang Chin-oh (張金鶚), land economics professor at National Chengchi University, who briefed the media on the findings, said the dismal figures would put pressure on cash-strapped sellers to lower prices to close deals.
“The housing market is likely to remain bleak with no improvement in sight,” Chang told a news conference. “The conclusion drawn here was in stark contrast with the findings of other agencies.”
Chang, whose gloomy remarks riled real-estate developers and brokers, defended his survey by saying it fell in line with the nation’s economic outlook. The government recently revised down the GDP forecast for this year to minus 2.97 percent, while foreign banks put the number at minus 3.2 percent to minus 11 percent. The economic woes have squeezed housing budgets, as 49 percent of house seekers target apartments priced between NT$3 million (US$86,338) and NT$6 million, followed by the NT$6 million to NT$9 million range, the poll said.
Nationwide, housing costs averaged 7.1 times buyers’ annual income, the survey showed, adding that the figure rose to 10.2 for people in Taipei City.
Mortgage spending consumed 29.6 percent of people’s income in the fourth quarter, down from 30.8 percent from a year earlier, the survey said. The burden reached 43 percent for homeowners in the capital.
Nearly half of the respondents, or 47 percent, expected housing rental fees to drop in the future on falling demand, Chang said, adding that 40 percent of them cited financial reasons.
The survey had a sample of 1,851 people in real-estate agencies and banking institutions who responded to questionnaires sent between Jan. 1 and Jan. 15.