Prices for existing homes in Taipei could fall for a second consecutive month in April, the first two-month decline since the global financial crisis, as a planned new housing tax deters buyers, the nation’s biggest real estate brokerage said.
Average existing home prices in Taipei fell 3.2 percent last month from February to NT$540,000 (US$18,642) per ping (3.3m2), Lee Jain-ming (李健銘), a researcher at Sinyi Realty Co (信義房屋), said in a telephone interview on Thursday.
Prices dropped for nine straight months to February 2009 following Lehman Brothers Holdings Inc’s bankruptcy.
The legislature last week approved the Ministry of Finance’s proposal to impose a 15 percent tax on investment properties sold within a year as prices surged to a record. The tax will be 10 percent for those sold in two years. The sales tax doesn’t apply to owner-occupied homes.
Premier Wu Den-yih (吳敦義) said the levy would help dampen property speculation and could come into effect as early as June 1.
“Home prices will likely fall further in the coming months until they find an initial floor when prices have corrected by as much as 10 percent,” Lee said. “Investors will either lose on tax or on prices.”
Asian neighbors, including Singapore and China, have also stepped up efforts to curb housing prices and counter accelerating inflation in the region.
Central bank Governor Perng Fai-nan (彭淮南) said last month the tax, rather than raising borrowing costs, would be more effective in curbing property speculation.
The central bank raised its benchmark interest rate by 0.125 percentage points to 1.75 percent last month, adding to increases of the same amount each in June, September and December from a record low of 1.25 percent.
Officials in December capped second-home mortgages in Taipei at 60 percent of the property’s price from a limit of 70 percent in June and broadened the curb to other areas, while also restricting loans using land as collateral to 65 percent of the real estate’s value.
Home prices in Taipei rose 12.2 percent last year to a record, Citigroup Inc analyst Dave Chiou (邱義昇) said.
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