Real estate remains the most favored investment vehicle among Taiwanese because many believe home prices will climb higher in the second half of the year, despite the weakening economy and looming exit of free money, Chinatrust Real Estate Co (中信房屋) said yesterday, citing an internal survey.
About 44 percent of the respondents said they believed property is the best defense against economic uncertainty, the highest since the broker first conducted the quarterly survey in spring 2009, it said.
The survey results came after the nation’s GDP growth slowed and the US Federal Reserve signaled plans to halt quantitative easing if the job market shows steady improvement.
“The findings should lend support to the property market, which has mostly recovered to the levels before the imposition of the special sales levy [in June 2011],” company chairman Chris Cheng-Yu (鄭余正全) said.
Investment interest in gold and precious metals slipped to 8.4 percent this quarter, down almost by half from 15.8 percent three months earlier, as international gold prices falter, the survey showed.
Meanwhile 17.5 percent of respondents said they prefer to hold on to cash, up from 15 percent previously, reflecting a flagging appetite for risk, Cheng-Yu said.
A substantial majority, 57.2 percent, voiced willingness to invest in real estate even if the Ministry of Finance keeps the special sales levy after it conducts an evaluation of the levy later this year, the survey found. Only 24 percent of respondents said they would stay on the sidelines.
The figures are seen as signs that the tax is losing its influence over the property market after transactions dropped to a nine-year low last year, Cheng-Yu said.
The respondents were divided about house prices, as 32.3 percent expect a pickup of up to 10 percent in coming six months, while 25.2 percent are looking at corrections of the same size, the survey said. Another 20 percent said home prices would remain around their present levels.
The central bank’s concern over rising property prices in Taoyuan County appears to have been effective in cooling the fever, as investment demand there dropped to 29.17 percent, from a record high of 50 percent in the fourth quarter, the survey found.
Property funds may flow back to New Taipei City (新北市), where investment needs increased from 31.48 percent to 42.86 percent, the survey found.
“All eyes will focus on the central bank’s board meeting tomorrow [today] to see if it will take further action to check property prices,” Chinatrust Real Estate vice chairman Richard Liu (劉天仁) said.
Some have speculated that the central bank would extend credit controls to districts in Greater Kaohsiung and New Taipei City that have seen steep housing price hikes.