Housing transactions in process slumped by double digits year-on-year in the nation’s six major municipalities last month as tightened lending terms and increased tax burdens sapped market confidence, brokers said.
A total of 21,094 housing deals took place last month in Taipei, New Taipei City, Taoyuan County, Greater Taichung, Greater Tainan and Greater Kaohsiung, slipping 15.1 percent from a year earlier and 8.9 percent from May, separate government data show.
The downturn is more evident in Taipei, which showed a 26.3 percent decline with 2,482 deals, and New Taipei City, down 24.8 percent with 5,336 deals.
Housing prices in the two cities had climbed sharply in recent years, motivating investors to take profits before the government introduces more unfavorable policies, said Evertrust Rehouse Co (永慶房屋), the nation’s largest real-estate agent by number of offices.
The Ministry of Finance in May raised house taxes from 1.2 percent to a maximum of 3.6 percent at the discretion of local administrators, and the central bank last month extended selective credit controls to four more areas in New Taipei City and parts of Taoyuan County, citing need to maintain financial stability.
Housing transactions dropped 14.2 percent year-on-year to 3,785 deals last month in Taoyuan County, which is set to upgrade to a special municipality later this year and had attracted heavy property investment in the past two years.
Greater Taichung and Greater Kaohsiung fared less badly last month with modest declines of 3.4 percent each from a year earlier at 4,301 and 3,478 deals respectively, government data indicated. Greater Tainan recorded 1,712 deals, representing a drop of 11.1 percent from the level a year ago.
Evertrust spokesman Andy Huang (黃舒衛) attributed the decline across the board to harsher than expected tightening measures as the November seven-in-one elections loom and high house prices top voters’ list of concerns.
The downtrend may continue, as the finance ministry is organizing large conferences later this month on property tax reform intended to raise taxes on owners of additional homes, Huang said.
Lai Cheng-yi (賴正鎰) chairman of Shining Construction Group recently said the extended credit control was the start of policy moves ahead of the presidential elections in 2016 aimed at cooling down the property market.
Lai said his company and his peers plan to wait out the period, until the presidential elections are over.
House prices in districts with a heavy supply are under correction pressure, the the Chinese-language Housing Monthly (住展雜誌) magazine reported, pointing to Danshui Districe (淡水) in New Taipei City where new housing projects amount to 66,100 units, accounting for more than 30 percent of the whole city.
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