The housing market is likely to see a modest pickup this quarter from last quarter as many people expect house prices to rise on the back of fund inflows, after the US launched new quantitative easing (QE) measures last month, two property surveys showed yesterday.
A sizable number of prospective buyers are not sure when to take action, as tightened lending terms and a hazy economic outlook make purchases more difficult, according to a quarterly survey by Evertrust Rehouse Co (永慶房屋), the nation’s largest broker by number of outlets.
A total of 53 percent of respondents said they were expecting house prices to rise, while 23 percent held the opposite view, with the number of optimists rising 11 percent from three months earlier, the survey showed.
Evertrust general manager Yeh Ling-chi (葉凌棋) attributed the improved sentiment to the US Federal Reserve’s announcement on Sept. 13 that it would spend US$40 billion buying mortgage-backed securities each month to support US economic growth.
Transactions are forecast to grow 20 percent in the Greater Taipei area this month from last month, Yeh said, adding that the bounce may be weaker for the rest of the country due to a relatively high base.
“The improvement is likely to last through the end of the year and consolidate in the first quarter of next year to correspond with the high season,” he said.
Sinyi Realty Inc (信義房屋) yesterday echoed Evertrust’s finding that sentiment had received a boost from the US’ latest QE operation.
Nearly 40 percent of potential buyers shared the belief that house prices would rise, while 63 percent considered real estate the best defense against inflation, Sinyi said in its report.
The New Taiwan dollar strengthened 0.9 percent against the greenback in the past month, central bank data showed.
Chuang Meng-han (莊孟翰), an industrial economics professor at Tamkang University, said that the QE measures would boost house prices, but the intensity might be weaker this time.
House prices gained 34 percent in Taipei and more than 70 percent in New Taipei City (新北市) following two previous US QE measures, Chuang said.
“A high base renders increases of that magnitude unlikely,” he said. “A series of credit controls have also helped to cool the property market.”
Domestic lenders have recently raised interest rates on home loans to about 2.4 percent, while the central bank has kept the benchmark discount rate unchanged at 1.875 percent.
The commercial lenders’ rate increases, coupled with lower loan-to-value ratios, have made buying a property more difficult, especially for those with limited funding, Chuang said.
Consequently, buying interest dropped to 27 percent this quarter, from 36 percent three months earlier, while respondents who said they were unsure about when to buy a property rose from 5 percent to 32 percent, the Evertrust survey found.