Pre-owned home sales in Taipei shrank 44 percent last month from January, with sales affected by fewer working days in the month and the Ministry of Finance’s plans to maintain the special sales levy, which it has said it is considering revising in June, analysts said.
Pre-owned home sales fell 44 percent month-on-month to 2,099 in the capital last month, or down 13 percent compared with the same period a year previous, city government data showed on Friday, after the Lunar New Year holiday and 228 Memorial Day cut the number of working days last month nearly by half.
“[The figures] marked the lowest level since the introduction [in June 2011] of the special sales levy” that subjects real-estate transactions to taxes up to 15 percent of trading value if they are resold within two years of purchase, said Andy Huang (黃舒衛), a spokesman for Evertrust Rehouse Co (永慶房屋), the nation’s largest real-estate agency by number of outlets.
Minister of Finance Chang Sheng-ford (張盛和) has said he would rather revise the levy, also known as the luxury tax, in June, but is unlikely to accede to the demands of some property developers and brokers to abolish it.
Lingering concerns over the luxury tax and increasing affordability of properties cooled home sales in Taipei last month even though the local bourse rallied near the 8000-point mark with daily turnover recovering to NT$80 billion (US$2.69 billion) on the back of improving economic sentiment, Huang said.
The plunge cut across all districts with sales in Neihu (內湖), Shihlin (士林) and Beitou (北投) retreating by more than 50 percent from a month earlier, the city government said.
The migration to relatively affordable housing elsewhere contributed to the sluggish trading in Taipei, said Jessica Hsu (徐佳馨), director of the research division at H&B Realty (住商不動產), the nation’s largest real-estate broker by number of franchises.
H&B Realty expects the situation to improve from this month onward as the economy emerges further from a period of slowdown with a sizeable extra number of houses likely to to be put on the market after meeting the two-year threshold and therefore being exempt from the luxury tax, Hsu said.
“That could allow sellers to reduce prices a bit,” Hsu said, adding that home prices in Taipei tend to hold relatively steady despite the levy and the government’s real-price registration requirement which was introduced in August last year.
The upcoming spring sales promotional period — from March 29 until April when developers unveil new projects — may offer a better insight into the health of the market, as the holiday periods are likely to have distorted last month’s data, Taiwan Realty Co (台灣房屋) said.
Properties priced between NT$12 million and NT$15 million are gaining in popularity as are smaller storefronts valued at between NT$30 million and NT$50 million, Taiwan Reality added.