Taiwan’s housing prices are likely to hit a new high in the current quarter, the traditional high season, because the central bank’s selective credit control measures failed to cool the property market last quarter, real estate experts said last week.
Meanwhile, real estate brokers expect the launch of direct flights between Taipei International Airport (Songshan) and Tokyo International Airport yesterday to further boost property prices in the Songshan (松山) and Neihu (內湖) districts near Songshan.
They called on the monetary policymaker to take stronger tightening measures as mild credit controls served only to push housing prices up in other parts of the nation, which was highlighted in a recent survey jointly conducted by Cathay Real Estate Development Co (國泰建設) and National Chengchih University.
Average house prices reached a record level for the second consecutive quarter of NT$209,600 (US$6,809) per ping in the July-to-September period, rising 6.22 percent from three months earlier and 15.43 percent from a year ago, according to the survey released on Thursday. One ping equals 3.3m2.
Chang Chin-oh (張金鶚), a land economics professor at Chengchih University and advocate of credit tightening, said excess liquidity and a rosy economic outlook more than offset the central bank’s interest rate hikes and selective credit controls in the whole of Taipei City and 10 popular areas of Taipei County.
“I’m surprised that the market appeared unfazed by the tightening measures last quarter, normally a low season,” Chang said. “The trend warrants more drastic steps if the government is serious to rein in soaring prices.”
Chang voiced worries that housing prices may climb this quarter with the advent of the high season that will last until the Lunar New Year.
The strengthening New Taiwan dollar helped drive investors back to the market on expectation that there remains room for profitability from real estate investments, Chang said.
Housing prices averaged NT$614,400 per ping in Taipei City last quarter, growing 5.52 percent from a quarter earlier and 20.45 percent from the level a year earlier, the survey showed.
“The figures counter the central bank’s September findings that its credit control stopped price hikes,” Chang said.
Real estate fever, formerly limited to Taipei City and parts of Taipei County, spread across the country last quarter, as housing prices became increasingly unaffordable in the capital, the survey said.
Housing costs rose to an average of NT$241,700 per ping in Taipei County, surging 8.91 percent and 22.96 percent from the preceding quarter and year respectively, the survey indicated.
Hua Ching-chun (花敬群), a finance professor at Hsuan Chuang University, attributed the uptrend to aggressive campaigns to lure prospective buyers to Taipei County where real estate value is expected to rise after its upgrade to the status of special municipality later this year.
Hua said the value gains may be exaggerated given the wage decline among average households.
Housing prices averaged NT$149,400 per ping in the Taoyuan and Hsinchu areas, up 9.15 percent from three months earlier and 11.46 percent from a year earlier, the survey said.
The index in Taichung reached an average of NT$142,200 per ping, gaining 5.27 percent from the preceding quarter and 5.07 percent on a yearly basis, the survey said.