The government’s housing-sector index flashed a second consecutive blue light in the fourth quarter, indicating that the property market would remain sluggish, with no sign of recovery on the horizon, a Ministry of the Interior agency said yesterday.
In its quarterly report, the Architecture and Building Research Institute said the leading housing index, a gauge used to predict market performance over the next three quarters fell 1.96 percent to 94.07 points from 95.95 three months ago.
SLOWER DROP
Chang Chin-oh (張金鶚), a land economics professor at National Chengchi University, who presented the findings, said the fall was sharp but slower than the 2.6 percent in the third quarter.
“The survey results should come as little surprise given rising unemployment and falling rents,” Chang told reporters. “The downturn has no chance of reversal as long as individual income and income from rent continues to contract.”
Three components of the leading index — construction stock values, national per capita income and consumer prices — sank further, while money supply aggregates and construction loans showed increases, the report said.
Chang said the data differed little from a quarter earlier, signaling the property market had yet to bottom out and downward price adjustments would persist for three to five years.
The concurrent real estate index stood at 100.8 points, down 0.07 percent from the third quarter, the report said.
Chang cast the decline as minor but steady.
UPS AND DOWNS
Of the six concurrent measures, only fresh mortgage loans and the housing utilization rate saw increases, while construction area, land deals, new housing prices and basic loan interest rates declined, the report said.
Chang said the figures were consistent with the prevalent sentiment in the real estate sector after the government’s economic climate indicator flashed a blue light for six months in a row last month.
Furthermore, the report said 47.73 percent and 19.7 percent of firms in the property industry believed a recovery in the second half was unlikely or very unlikely.
Some 24 percent said a reversal was possible, while less than 10 percent voiced strong optimism, the report said.
Chang said property brokerages and advertisers appeared relatively upbeat compared with other firms in the industry.
OPTIMISTS
Optimistic respondents cited interest rate cuts and subsidy programs for buying property, while pessimistic respondents underscored increases in the unemployment rate and property foreclosures as well as shrinking investment in real estate.
Chang advised firms and prospective buyers to be cautious.
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