The number of prospective home buyers grew modestly in the second quarter from the preceding quarter, although they spent less after the government introduced a luxury tax earlier this month, a survey showed yesterday.
The findings suggest healthy demand for residential properties ahead, with the majority of respondents, 54.31 percent, planning to buy homes in the near future, up 1.31 percent from the previous quarter, the Chinatrust Real Estate Co (中信房屋) survey showed.
Home buyers on average are looking for houses priced at NT$6.88 million (US$237,159) and have prepared NT$3.07 million for the down payment, shrinking 4 percent and 4.6 percent from the previous quarter, the survey found.
“The figures show that the luxury tax has failed to sap demand for residential properties, although it has weakened transactions and fueled expectations of a price fall,” company chairman Chris Cheng-Yu (鄭余正全) said.
First-time home buyers accounted for 50.6 percent of the transactions this quarter, while 3.9 percent cited outright profit-taking, indicating that long-term investment needs drove the remaining trade, the survey said.
One-third of respondents considered real estate to be the best defense against inflation, followed by gold and other precious metals at 19.2 percent, the survey said.
The survey was conducted online nationwide between May 30 and June 8, with 1,068 valid samples from 1,229 potential home buyers.
On June 1, the government implemented the luxury tax, which levies a tax of between 10 percent and 15 percent on houses resold within two years of purchase. Central bank data released yesterday showed a slower increase in the nation’s mortgage and construction loans last month.
The central bank said mortgages increased by 0.23 percent to NT$5.24 trillion last month, following growth of 0.24 percent and 0.44 percent in the previous two months.
Meanwhile, construction lending edged up 1.17 percent to NT$1.35 trillion last month, after increases of 0.4 percent and 1.66 percent in the previous two months, the central bank said.
Chinatrust Real Estate expects the housing market to remain sluggish in the third quarter with sellers and buyers locked in a pricing tug-of-war.
Forty-three percent of respondents expect a 10 percent price concession, while 37.2 percent expect prices to drop between 20 percent and 30 percent, the survey said.
So far, neither side is willing to bend, with the survey showing that nearly 70 percent of respondents were unwilling to purchase real estate without a price concession, while 81 percent were unwilling to sell at lower prices.
The standoff caused a 30 percent plunge in brokerage sales this quarter, compared with last quarter, Chinatrust real Estate vice chairman Richard Liu (劉天仁) said. He did not elaborate on turnover data.
An overwhelming majority, 75 percent, said housing prices topped their list of concerns when shopping for homes, followed by interest rates at 49 percent and location at 44 percent, the survey showed.
Consequently, an increasing number of home buyers are willing to settle in New Taipei City (新北市), Greater Tainan and Greater Kaohsiung given skyrocketing house prices in Taipei City, the survey said.