The nation’s property market is expected to shrink by more than 10 percent this month, after hitting a 14-month high last month, as Typhoon Morakot and the government’s decision to halt preferential mortgage loans prompted prospective buyers to remain cautious, analysts said.
Property transactions reached 40,492 units nationwide last month, the highest level since June last year, Ministry of Interior data showed. The momentum appeared to have subsided somewhat this month as Morakot dampened consumer confidence and the government, strapped for funds to rebuild hard-hit areas, decided not to replenish preferential mortgage loans to stimulate the market.
Victor Chang (張欣民), general manager at Pacific Assets Management Co (太平洋資產管理), said the property market entered a downward correction this month, with a contraction in transactions estimated at between 10 percent and 15 percent.
“The disaster took a toll on consumer confidence,” which shed 3.18 points to 53 this month, with all six indicators moving down, Chang said by telephone.
Chang said the government’s decision to halt preferential mortgage loans dealt another blow to the sector, especially to first-time homebuyers.
Jeffry Huang (黃增福), an associate manager with Evertrust Rehouse Co (永慶房屋), attributed the market adjustment partly to growing property prices.
Huang said house prices had picked up since March, with residences at prime locations recovering to their pre-recession level, in part amid expectations that improving cross-strait trade would bring Chinese capital and boost property value here.
“Talks of an economic cooperation framework agreement have failed to make any headway, leading buyers to think twice about entering the market,” Huang said.
Huang said the correction would persist unless the governments on both sides of the Taiwan Strait reach an understanding or sellers agree to lower their prices.
Property prices are so high that it would take average wage earners more than a decade to own an apartment in Taipei City — and that’s without living expenses, local media said.
Chang said most sellers would adopt a wait-and-see attitude as economic fundamentals have shown signs of recovery.
The property market could regain momentum in the fourth quarter, when GDP is expected to turn positive and people are more inclined to make real-estate investment before the end of the year, Chang said.
Huang was also optimistic, linking his assessment to hopes that cross-strait financial agreements will be reached later this year.
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