Thu, Mar 28, 2013 - Page 13 News List

Broker sees steady property sales

By Crystal Hsu  /  Staff reporter

Housing transactions are likely to hold steady next quarter as an improving economy bolsters home-buying interest, but the central bank may take further steps to cool the property market, Chinatrust Real Estate Co (中信房屋) said yesterday.

More people have expressed an interest in buying homes over the next two years, compared with three months earlier, after different research institutions raised their forecasts for GDP growth this year, the real-estate broker said, citing an internal quarterly survey.

About 56 percent of respondents plan to buy a house in the coming two years, up from 52 percent a quarter earlier, with 36.5 percent planning to take action within a year, and 14 percent planning to do so within six months, company chairman Chris Cheng-Yu (鄭余正全) said.

The findings lent support to a gradual recovery in consumer confidence as the nation emerges from a global slowdown last year, during which existing home sales dropped 9 percent from 2011, Cheng-Yu said.

The survey also showed that 38.88 percent of respondents were positive about the economic outlook, compared with only 23.31 percent three months earlier.

The improvement in sentiment is favorable for a pickup in housing transactions, but the pace may not become evident until the second half of the year, Chinatrust Real Estate vice chairman Richard Liu (劉天仁) said.

While new construction projects for the spring promotion campaign total NT$430 billion (US$14.39 billion), higher than in 2008 before the global financial crisis struck, it reflects optimism on the part of developers rather than prospective buyers, Liu said.

“Housing prices and transactions are likely to be flattish during the spring sales season [this month to next month] compared with the same period last year,” Liu said, contrary to the prevailing view among peers of a strong recovery.

The special sales levy, which subjects houses resold within two years of purchase to a maximum tax of 15 percent, remains a risk after the Ministry of Finance indicated plans to conduct a review in June, Liu said.

More than 75 percent of respondents have suggested that the ministry limit the tax to second-home owners or introduce a progressive tax mechanism under which people with higher income pay a higher levy, Liu said, citing the survey.

Steven Yang (楊家彥), an economist at the Taiwan Institute of Economic Research (台灣經濟研究院), said the central bank posed the biggest uncertainty over the property market, as it is determined to rein in housing prices.

The bank, which is holding its quarterly board meeting today, may extend credit controls from Greater Taipei to Taoyuan County, where housing prices have climbed sharply in recent years, Yang said.

The central bank may further cut loan-to-value ratios for homes in popular districts because their prices have remained resistant to tightening measures, the economist said, adding that he expected the central bank to keep interest rates unchanged given the fragile economic recovery.

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