Thu, Jul 14, 2011 - Page 12 News List

Luxury tax fear fading: poll

By Crystal Hsu  /  Staff Reporter

Concerns over the luxury tax are fading as many people expect Taiwan’s housing prices to remain steady this quarter and pick up in the coming year on the back of investment needs and limited supply, according to a survey released yesterday.

The survey by Yung-Ching Rehouse Co (永慶房屋), the nation’s largest broker by outlets, showed 58 percent of respondents had a positive view on housing prices in the next 12 months, up from 31 percent three months earlier.

The number of respondents with a long-term bearish outlook fell to 26 percent, from 52 percent, the survey found.

For the near future, 42 percent expect home prices to stay neutral or inch up this quarter, while the number of pessimists dropped to 19 percent, from 65 percent in the first quarter when news of the luxury tax cut housing transactions by 30 percent, the survey said.

Chuang Meng-han (莊孟翰), industrial economics professor at Tamkang University, said the findings affirmed his prediction made months earlier that the special levy would not trigger a price correction in light of excess liquidity, low interest rates and limited supply.

“Keen investment needs and a lack of supply supported housing prices after the exit of speculators,” Chuang told a media briefing. “Complaints about unaffordable housing will continue to plague the government if the trend persists and it most likely will.”

In Taipei City last year, first-time registered households stood at more than 10,830, accounting for only 17 percent of 63,350 home transfers during the same period, the academic said.

The gap resulted partly from a supply shortage in the capital city and would deepen expectations of price hikes, Chuang said.

Chuang, who tracks the nation’s property market, said housing prices were unreasonable if the hikes exceeded GDP growth.

Home prices in the capital expanded 192 times between 1966 and last year, while GDP increased 70 times and the inflation reading gained seven times, he said.

“It seems property prices jumped ahead of the expected inflows of Chinese and other foreign capital after Taiwan improved ties with China,” the academic said.

The upbeat sentiment prompted 43 percent of respondents to consider entering the market in the next six months, the survey showed.

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