Tue, Mar 29, 2011 - Page 12 News List

Housing prices remain at record-high levels

By Crystal Hsu  /  Staff Reporter

Housing prices climbed to record-high levels in the fourth quarter with home loans accounting for more than 50 percent of household incomes in Taipei City, a government survey released yesterday showed.

The findings lend further support to the government’s plan to introduce a luxury tax on short-term property transactions, as a majority of the public considered home prices unreasonably high, the survey said.

The average price of housing transactions last quarter was NT$8 million (US$270,000) nationwide and NT$15 million in Taipei, both new highs, the survey by the Ministry of the Interior’s Construction and Planning Agency showed.

Housing costs surged to 14.3 times the average household income in Taipei City during the October-to-December period, from 11.1 times three months earlier, the survey said, adding that the same ratio rose to 8.9 for the rest of the country from 8.0 in the preceding quarter.

“The findings indicated that home prices continued to pick up, while wages remained stagnant,” said Chang Chin-oh (張金鶚), an economics professor at National Chengchi University who helped organize the study.

Mortgages took up 56 percent of household income in the capital last quarter compared with 43.8 percent in the third quarter, while the burden elsewhere grew to 36 percent from 32.2 percent, Chang said.

The academic attributed the soaring housing prices to property speculation as the survey showed investment needs drove 26 percent of home transactions in Taipei City and 20.5 percent in Greater Kaohsiung. The national average was 17.9 percent.

The fourth-quarter data indicated a series of tightening measures by government failed to curb home prices, leading a majority of new home buyers (53 percent) to consider housing prices unreasonably high.

Nearly 40 percent of respondents expected home prices to edge up this quarter, while 42 percent believed the trend would continue in the coming 12 months, the survey found.

“Prospective home buyers might want to wait and see because housing costs may have peaked now that the government plans to impose a heavy levy on property speculation, which might trigger a price correction,” Chang said.

The proposed tax, which would subject properties resold within two years of purchase to a 10 percent levy, appears to be having a limited impact on luxury home prices as an auction yesterday for an apartment unit Taipei’s Xinyi District (信義) went for NT$1.82 million per ping — in line with market rates.

A Taipei resident won the unit measuring 156.1 ping on the 11th floor of an upscale residential complex for NT221 million, or 13.33 percent higher than the floor price.

Sinyi Realty Co (信義房屋), the nation’s only listed brokerage, said the outcome indicated luxury homes in prime locations remain popular despite tightening measures.

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