Following several government measures to rein in the real estate market, an academic yesterday urged the public to delay plans to buy a home as prices could soon start reversing.
Chang Chin-oh (張金鶚), land economics professor at National Chengchi University, said the central bank’s recent move to selectively restrict credit would lead soaring property prices to gradually reverse in half a year, with prices seeing a clear downward trend a year from now.
“It is not the best time [for home buyers] to enter the property market now,” Chang told reporters on the sideline of his book launch in Taipei, adding that housing prices were now relatively high.
“If you buy a house now, you’d be trapped [at high price levels],” he said. “Home shoppers should weigh their financial conditions before purchasing a property and should never overspend.”
Rising property prices and a protracted period of low mortgage loan rates as part of the government’s efforts to spur economic activity have created a feeling that interested buyers should make their decision as soon as possible, Chang said.
Chang warned, however, that a heavy mortgage burden could affect homeowners’ quality of life.
The professor called on the government to establish a favorable housing rental environment instead, such as offering rent subsidies for those who cannot afford to buy a house.
Chang attributed the sharp run-up in property prices to short-term real estate speculators rather than an insufficient supply of houses.
“The vacancy rate of houses in Taipei is still high and it is getting worse,” he said, adding that although many houses have been sold, many of them were empty.
“No matter how much the government tries to increase property supply to stop prices from soaring, it wouldn’t solve the problem unless it could restrain the problem of investors speculating on real estate,” he said.
Amid unreasonably high property prices, Chang said it would help the overheating real estate market if fewer people are buying houses.
“An asset bubble is already taking hold,” he said.
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