The housing market, which has seen transactions plunging for nearly two months, is poised for a price correction now that a bill to tax short-term property transfers has cleared the legislature, analysts said yesterday.
The depth of correction is expected to match or exceed the tax rates — from 10 percent to 15 percent of trading prices, if properties are resold within one to two years of their purchase — they said.
“The enactment of the luxury tax bill removes a lingering uncertainty from the market,” Lee Jain-ming (李健銘), a researcher at Sinyi Realty Co (信義房屋), said by telephone.
“The selling side will be more willing to soften prices now that the levy will be implemented,” Lee said.
Housing prices remain virtually unchanged after the government unveiled the luxury tax plan in late February, although transactions have nearly halved in parts of the nation while the number of houses for sale have increased sharply.
The number of homes for sale in the prime Xinyi District tops other areas in Taipei, picking up 40 percent last month and this month, compared with January and February, Lee said.
Songshan (松山) and Shihlin (士林) districts rank second and third, as the number of homes for sale jumped 37 percent and 32 percent respectively during the same period, he said.
Meanwhile, available homes surged 40 percent in Linkou (林口), New Taipei City (新北市), followed by Banciao (板橋) at 35 percent and Sinjuang (新莊) at 30 percent, where speculation accounts for 50 percent of transactions in recent two years, Lee said.
Sinyi Realty, the nation’s only listed housing brokerage, expects home prices to shed 5 percent to 10 percent in Taipei and drop up to 20 percent in New Taipei City until the end of the lunar Ghost Month in late August.
Evertrust Rehouse Co (永慶房屋), another major broker, said the luxury tax legislation showed the government was serious about cooling the property market after previously limiting its efforts to moral persuasion.
“The legislation will help put an end to this tug of war over pricing and boost transactions ahead of the tax’s implementation,” Evertrust Rehouse head researcher Jeffry Huang (黃增福) said by telephone.
The selling pressure is more evident for presale housing projects, whose transactions entail less capital and are consequently rife with speculators, Huang said.
While pre-sale housing projects won’t be liable for the luxury tax before the construction is finished, buyers have faced potentially higher interest rates after the central bank started to tighten monetary policy in June last year, the researcher said.
The National Tax Administration has also stepped up a crackdown on tax evasion by presale housing traders to close a legal loophole.
Hua Ching-chun (花敬群), a banking and finance professor at Hsuan Chuang University, who closely tracks the property market, said buyers would remain cautious until after next year’s presidential election.
“The tax legislation marks the beginning of a correction that may last longer than a year,” Hua said. “Home prices should drop by half in New Taipei City in the absence of speculation.”
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
A proposed 100 percent tariff on chip imports announced by US President Donald Trump could shift more of Taiwan’s semiconductor production overseas, a Taiwan Institute of Economic Research (TIER) researcher said yesterday. Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the US, leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand, Arisa Liu (劉佩真) at the institute’s Taiwan Industry Economics Database said in a telephone interview. Trump’s move signals his intention to "restore the glory of the US semiconductor industry," Liu noted, saying that
AI: Softbank’s stake increases in Nvidia and TSMC reflect Masayoshi Son’s effort to gain a foothold in key nodes of the AI value chain, from chip design to data infrastructure Softbank Group Corp is building up stakes in Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the latest reflection of founder Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence (AI). The Japanese technology investor raised its stake in Nvidia to about US$3 billion by the end of March, up from US$1 billion in the prior quarter, regulatory filings showed. It bought about US$330 million worth of TSMC shares and US$170 million in Oracle Corp, they showed. Softbank’s signature Vision Fund has also monetized almost US$2 billion of public and private assets in the first half of this year,
RSS