Fri, Sep 28, 2012 - Page 14 News List

Home prices strong in spite of buyers’ caution

FAVORED INVESTMENT:Inflationary pressure and an uncertain global economic climate are driving investors to see refuge in the property market, two reports said

By Crystal Hsu  /  Staff reporter

Housing prices are likely to climb higher next quarter, but transaction volumes may stagnate, two reports said yesterday.

The reports said that real estate remained the most favored investment tool among the public in the face of inflationary pressure, but potential buyers are cautious about making a move.

About 62 percent of respondents believe prices for existing homes would rise by 5 to 10 percent for the rest of the year, but that buying interest would stay flat, according to a quarterly survey conducted by Chinatrust Real Estate Co (中信房屋).

Only 19 percent of the polled said they expected housing prices to fall, while 15 percent did not have an opinion, the survey showed.

“With the economic outlook still cloudy, most people consider real-estate properties the best defense against market volatility,” company chairman Chris Cheng-Yu (鄭余正全) said.

This will continue to underpin housing prices, although many complain about increasingly unaffordable living and housing costs, Cheng-Yu said.

Existing-home prices in Taipei held steady at NT$567,000 (US$19,272) per ping (3.3m2) this quarter, despite the implementation of the government’s new price-registration measure last month, the survey found.

Buying interest was little changed at 40.83 percent this quarter, compared with 40.82 percent three months earlier, the survey showed, while a sizable number of prospective buyers said they intend to stay on the sidelines as the economic slowdown pans out.

The figures suggest subseasonal trading in the coming months, which is historically a high season for the property market, Cheng-Yu said.

People intent on buying homes said the increase in mortgage interest rates by state-run banks would not change their plans, but they may have to lower their budget a little, the survey said.

The Chinese-language Housing Monthly arrived at similar findings, saying that prices for presale and new homes edged up this quarter from last quarter.

New-home prices gained 3.8 percent to NT$760,000 per ping in Taipei during the July-to-September period and rose 2.2 percent in New Taipei City (新北市), the publication’s spokesman, Ni Tzu-jen (倪子仁), said in a report.

The trend is likely to extend into the fourth quarter after the US Federal Reserve adopted a third round of bond-buying operations, with some idle funds expected to flow to real-estate properties, Ni said.

New-home prices in Taipei’s Zhongzheng District (中正) reported the biggest increase of 6.3 percent this quarter, followed by Xinyi District (信義) at 5.5 percent and Beitou District (北投) at 3.4 percent, the report said.

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