Thu, Mar 20, 2014 - Page 14 News List

Existing home sales to shrink: broker

OVERSUPPLY:The number of houses for sale have increased by between 4 percent and 52 percent in major cities, but buying willingness is on the decline, Evertrust said

By Crystal Hsu  /  Staff reporter

Existing home sales are likely to shrink slightly next quarter compared with this quarter as the mismatch between supply and demand continues to widen, especially for high-end units, Evertrust Rehouse Co (永慶房屋), the nation’s largest broker by number of offices, said yesterday.

Houses for sale have increased by between 4 percent and 52 percent in major cities so far this year as investors seek to cash out, but many have yet to find buyers, Evertrust general manager Yeh Ling-chi (葉凌棋) told a media briefing.

Nearly 50 percent of respondents to a survey by the company said they plan to sell their homes within the next six months, up from 46 percent three months earlier, the quarterly survey indicated.

A separate poll by Cathay Financial Holding Co (國泰金控) arrived at similar findings, with 46.3 percent intent on selling, while 76.9 percent said now is not a good time to buy a home.

“The figures lend support to our observation over the past two years that affordable housing will dominate the market, while demand for luxury homes will shrink,” Yeh said.

Affordability translates into different price ranges in different parts of the nation, the survey said.

Houses for sale in Taipei rose by 4 percent this year, with those priced at NT$15 million (US$492,800) or lower in shortage, while those with price tags of NT$30 million or higher have difficulty finding buyers, according to the survey.

About 12.5 percent of houses for sale have asking prices of NT$60 million or more in the capital, but they accounted for only 4 percent of closed deals, Yeh said.

In New Taipei City, affordable homes are those priced at NT$9 million or lower, and houses priced at about NT$15 million are likely to remain on the market for a protracted period, Yeh said.

The affordable threshold is NT$7 million in Taoyuan County, where houses for sale rose 49 percent this year, making them vulnerable to price corrections, Yeh said.

Houses for sale in Greater Taichung increased the fastest by 52 percent this year, with homes priced NT$7 million or lower in great demand, while for those selling for more than NT$9 million, there is little demand, the survey found.

In Greater Kaohsiung, affordable houses are those priced around NT$4 million, while those selling for NT$7 million or more are in oversupply, the survey showed.

“The figures suggest a huge gap between housing prices across Taiwan, with homes in Taipei on average costing four times more than those in Kaohsiung,” Yeh said.

Chuang Meng-han (莊孟翰), a professor of industrial economics at Tamkang University, said house prices in areas with large supply are likely to fall if transactions remain sluggish.

Houses for sale increased by 34 percent in Greater Kaohsiung and by 43 percent in Greater Tainan this year, from their year-ago levels, the survey showed.

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