The housing market regained momentum last month, as reflected in a pick-up in housing prices and transactions in the greater Taipei area, indicating that the imminent implementation of a luxury tax may not trigger a market correction as some have anticipated, the nation’s major real-estate agencies said yesterday.
Sinyi Realty Co (信義房屋), the nation’s only listed property brokerage, said it has not seen a price correction yet. The housing price index, compiled by Sinyi, rose to 205.1 last month for the greater Taipei area, from 204.9 in March, company chief researcher Stanley Su (蘇啟榮) said by telephone.
Housing prices averaged NT$532,000 per ping (3.3m2) in Taipei City last month, rising from NT$527,000 per ping in January, Sinyi statistics showed.
Housing transactions in the greater Taipei area make up about 70 percent of Sinyi’s home sales nationwide, Su said.
Meanwhile, the number of housing units for sale fell 15 percent this month from the level in January, bucking expectations of panic selling ahead of the luxury tax that takes effect on June 1.
The tax will subject properties resold within two years of purchase to levies of 10 percent of 15 percent of trading prices. News of the luxury tax came to light in late February, bringing down home trading by 30 percent last month, compared with January.
“The absence of panic selling showed the market has regained its calm somewhat,” Su said. “But it is too early to declare the luxury tax a failure because it has yet to go into practice.”
Transactions became steady last month, compared with March, as prospective buyers resumed shopping around and stopped unreasonable bargaining, Su said.
“Sellers would rather lease vacant houses or wait for two years than lower prices sharply,” Su said. “The stable economy lends support to a patient approach.”
Evertrust Rehouse Co (永慶房屋) came to similar observations, as it saw its homes sales increase 5 percent in the greater Taipei area this month from last month, while the number of housing units for sale flattened from January, Evertrust head researcher Jeffery Huang (黃增福) said by telephone.
“The figures suggest the cautious sentiment is easing after the luxury tax plan started to weigh [in February],” he said.
Huang said it was difficult for housing prices to trend down in light of excessive liquidity and low interest rates.
Evertrust’s housing prices have remained nearly unchanged at NT$503,000 per ping in the nation’s capital this month, from NT$506,000 per ping in January, Huang said.
“While it will take a longer time to gauge the impact of the luxury tax, the favorable macroeconomic conditions surely helps support the housing prices,” Huang said.