New construction volumes totaled NT$315.1 billion (US$10.43 billion) last quarter, shrinking 21.5 percent from the previous quarter, as home prices started to show signs of softening and may drop even more if demand continues to weaken, a report by Cathay Real Estate Development Co (國泰建設) said yesterday.
“The trend of turnaround is particularly evident in New Taipei City and Hsinchu County, where both transactions and housing prices retreated due to increasing selling pressure, but soft demand,” Takming University of Science and Technology professor Hua Ching-chun (花敬群) told a media briefing.
Altogether, developers and builders launched 15,888 housing units during the January-to-March period, down 18.7 percent from the preceding quarter and 9.3 percent from a year earlier on expectations of a slow season, the survey by National Chengchi University’s Taiwan Real Estate Research Center (台灣房地產中心) found.
All six subindices fell in New Taipei City after its property boom in recent years, thanks to increasing unaffordability in neighboring Taipei and improved infrastructure, notably the extension of the mass rapid transit system, Hua said.
“Much-expected price corrections may manifest in districts with heavy inventory if sales fail to improve soon,” Hua said.
Average asking prices stood at NT$386,700 per ping (3.3m2) in New Taipei City, down 7.7 percent from a quarter earlier, while price concessions rose to 15.4 percent and the 30-day sales rate fell 26.93 percent, the report found.
In Hsinchu, trading retreated 78.53 percent in the first quarter, showing that demand was overestimated in the county, Hua said.
New home prices were firm in Taipei at NT$829,800 per ping last quarter, up 2.14 percent from three months earlier, the report said.
New construction volume plunged 51.9 percent to NT$38.3 billion, Hua said, adding that the decline was mainly due to limited supply.
The new home market fared better in central and southern regions.
New home prices gained 2.81 percent to NT$206,100 per ping, while advancing by 10.97 percent to NT$154,100 per ping in Greater Tainan and by 12.72 percent to NT$207,900 per ping in Greater Kaohsiung, the report said.