Mon, Aug 03, 2009 - Page 12 News List

UBS predicts rise of 20% to 30% in housing prices


Housing prices are expected to rise between 20 percent and 30 percent over the next two to three years after the housing market bottomed out in the first quarter, an analyst with Union Bank of Switzerland (UBS) said yesterday.

The housing market is showing signs of recovery, UBS analyst Chung Chao-an (鍾朝安) said, with trade volume rising 47 percent quarter-on-quarter last quarter.

Housing resale prices saw 10 percent quarterly growth and 3 percent growth year-on-year, Chung said.

Despite a 1.6 percent quarterly drop in prices of new housing, between 70 percent and 80 percent of properties sold in the first quarter were resales, he said.

Judging from the increase in prices and trade volume, the market seems to have bottomed out in the first quarter, Chung said.

He predicted that the unemployment rate could reach a peak in the fourth quarter of this year or the first quarter of next year and that there would be room for house prices to rise further after that.

Over the next two to three years, an anticipated increase in trade with China and an overall recovery of the domestic economy and consumer confidence amid a low-interest rate environment should push realty prices higher, he said.

Meanwhile, Chung suggested that investors buy shares in Taiwan Fertilizer (台肥) and Far Eastern Textile (遠東紡織) because their portfolios contain assets with high potential for development.

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