Transactions for presale and newly completed houses nationwide dropped last quarter from three months earlier, while home prices held steady on a sustained standoff between developers and buyers, a report released yesterday showed.
Developers and construction firms produced 13,665 new housing units during the October-to-December period worth NT$212.9 billion, the quarterly report by Cathay Real Estate Development Co (國泰建設) and National Chengchi University’s Taiwan Real Estate Research Center (台灣房地產中心) showed.
The value shrank 24 percent from the preceding quarter, but only 11 percent sold, falling 30 percent from the third quarter, the report said. The latest figures drew mixed reactions, with academics forecasting a price fall, but developers anticipating a slow recovery.
National Chengchi University land economics professor Chang Chin-oh (張金鶚), the head of the research panel, said the market would remain sluggish unless developers and construction firms lowered prices.
“Liquidity and inventory concerns will drive developers to lower prices,” Chang said. “The correction might not be evident now, but it will surely gather momentum following the introduction of the special sales levy [in June last year] and the implementation of the transactions registration rule on July 1.”
Transactions for new housing priced at NT$1 million per ping (3.3m2) or higher came nearly to a halt last quarter, intensifying pressure for price adjustments, Chang said. However, new housing prices in Taipei inched up to NT$688,500 per ping last quarter, from NT$680,000 in the third quarter, while prices in New Taipei City (新北市) climbed to NT$370,400 per ping from NT$360,000, the report said.
“The prices cannot hold given so few transactions, which dropped to single digits for upscale projects in Taipei,” Chang said.
Trading in New Taipei City was less dismal last quarter owing to relatively lower prices, but oversupply might cast a shadow going forward, the academic said.
Cathay Real Estate associate manager Chen Jen-tse (陳仁澤) disagreed, saying political -uncertainty accounted for the slump in transactions last quarter.
“We believe the market is over that, as evidenced by increasing buying interest over the Lunar New Year holiday,” Chen said.
The tight presidential race prompted many prospective buyers to postpone purchase decisions out of fear that an opposition win could have ushered in more unfavorable housing policies, Chen said.
Democratic Progressive Party Chairperson and former presidential candidate Tsai Ing-wen (蔡英文) plugged tax reforms on the campaign trail to make housing prices more affordable, but investment more expensive.
Chen said the housing market would start to see a slow but steady recovery from this quarter onward, with properties in prime locations still being popular.
Low interest rates and excess capital would lend support to the trend, he added.