The nation’s housing prices rose by double digits to a seven-year high last year and that trend is likely to extend into the first half of this year amid excessive liquidity and low capital costs, real-estate experts said yesterday.
Average home prices increased 10.39 percent last year from a year earlier, while 30-day trading volume jumped 29.15 percent, according to a survey jointly conducted by Cathay Real Estate Development Co (國泰建設) and National Chengchi University.
The quarterly survey suggests the robust property market could remain for the next six months before taking a break in the second half on technical correction and government intervention, said Chang Chin-oh (張金鶚), a land economics professor at the university. Home prices in Taipei City hit a record NT$633,900 per ping (3.3m2) in the fourth quarter, rising 3.18 percent from a quarter earlier and 15.6 percent from a year earlier, the report indicated.
Housing prices in neighboring New Taipei City (新北市) also reached a new high of NT$261,600 per ping, increasing 8.21 percent from the third quarter and 29.9 percent from the year-earlier level, the report said.
“The figures showed that the series of [government] tightening measures were inadequate in reining in housing prices in the greater Taipei area,” Chang said. “The prices probably have yet to peak given the active trading.”
Last month, the central bank, seeking to curb property speculation, lowered the loan-to-value ratio from 70 percent to 60 percent for second homes in the capital and 12 areas in New Taipei City.
Last week, the Cabinet approved the plan to fine idle and underused land plots to stop land hoarding.
The Financial Supervisory Commission is mulling raising risk control requirements for land acquisitions by insurance firms, while the Ministry of Finance is studying the possibility of taxing short-term land transfers.
“The measures will have very limited impact in light of their mild nature,” Chang said.
“More drastic credit controls are necessary if the government is serious about cooling the property fever” that has affected all of northern Taiwan and is moving southward, Chang added.
Home prices in Taoyuan and Hsinchu stayed almost flat sequentially in the fourth quarter at NT$149,500 per ping, but gained 14.77 percent from a year earlier, while the 30-day sale rate and trading volume surged 54.44 percent and 131.72 percent respectively from a year earlier, the report said.
The figures lent support to concern that property speculation has expanded to other parts of Taiwan, driven by lower costs there, said Hua Ching-chun (花敬群), a banking and finance professor at Hsuan Chuang University.
Housing prices averaged NT$132,300 per ping in Tainan and Kaohsiung in the fourth quarter, increasing 13.69 percent from a year earlier, while 30-day transactions expanded 143.31 percent, the report indicated.
Hua said home prices could strengthen for another two quarters, putting pressure on the government to intervene toward the end of the year, especially if the legislative elections are held.
“The price hikes will intensify complaints and lead to a correction later” when owning a home also becomes untenable in central and southern Taiwan, he said.
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