Fri, Apr 13, 2012 - Page 12 News List

Inflation pressures good for real estate: brokers

POSITIVES:Low interest rates and excess liquidity are also expected to boost interest in housing, with a poll showing fewer people now expect prices to trend down

By Crystal Hsu  /  Staff Reporter

Increasing inflationary pressures are positive for the property market as evidenced by a sharp pickup in buying interest and transactions, major real-estate brokers said yesterday.

Evertrust Rehouse Co (永慶房屋), the nation’s largest broker by the number of outlets, saw its transactions in Greater Taipei increase 30 percent last month from February, 40 percent in Greater Taichung and 50 percent in Greater Kaohsiung, general manager Yeh Ling-chi (葉凌棋) told a media briefing.

Yeh attributed the rebound to receding concerns over the European debt crisis and the improving economy at home.

The pickup may accelerate in the coming months, aided by heightened inflationary pressures after the government raised fuel prices by about 10 percent and looks set to raise electricity rates next month, Yeh said.

“Upside inflation risks will drive idle funds to the property market as real estate has proved a popular and reliable defense tool,” he said, adding that low interest rates and excess liquidity would lend a helping hand.

Sinyi Realty Inc (信義房屋), the nation’s only listed real-estate broker, voiced a similar view, saying more people now expect house prices to go up rather than down this quarter, although they are not eager to enter the market.

Only 28 percent of respondents in the company’s recent survey expected house prices to fall, compared with 62 percent at the end of last year, Sinyi head researcher Stanley Su (蘇啟榮) said.

The upturn in sentiment suggests the housing market bottomed out last quarter and is on track for a gradual, but steady recovery in the absence of more surprises from the government, Su said.

The Ministry of Finance is mulling overhauling property taxes based on real market prices, instead of government-assessed values, which would significantly increase holding costs and deal a big blow to the property sector, Su said.

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