Major real-estate brokers reported weak sales results last month with overall transactions plunging 20 percent in Greater Kaohsiung due to negative sentiment caused by the fatal gas pipeline explosions on July 31 and Aug. 1.
Sinyi Realty Inc (信義房屋), the nation’s only listed broker, saw housing deals gain 2 percent last month from July with housing prices falling to levels not seen since last year.
Transactions picked up 4.9 percent in Taipei last month, while housing prices averaged NT$679,000 (US$22,720) per ping (3.3m2), compared with the NT$689,000 per ping seen in July, the company said in a statement.
Housing deals in New Taipei City dropped 5.9 percent with average prices standing at NT$365,000 per ping last month, down from the NT$374,000 per ping recorded in July, Sinyi said.
Taoyuan, Greater Taichung and Greater Tainan fared better last month with gains on flat prices of 13.3 percent, 19.3 percent and 4.9 percent respectively, Sinyi said.
However, trading volume plummeted 21.3 percent in Greater Kaohsiung although housing prices held relatively stable at NT$165,000 per ping last month, from the NT$168,000 per ping seen in July, Sinyi said, as the explosions paralyzed parts of thecity and chilled sentiment.
“The figures show it is a buyer’s market, and those looking to purchase real estate can explore their options and demand greater concessions on price given the political uncertainty ahead,” Sinyi researcher Tseng Chin-der (曾進德) said in a statement.
Evertrust Rehouse Co (永慶房屋), the nation’s largest real-estate agency by number of offices, recorded weaker sales and flat prices last month attributable to government discussions of unfavorable policies.
Housing transfers gained 3 percent in Taipei but dropped 11 percent in New Taipei City last month, with prices averaging NT$638,000 per ping and NT$407,000 per ping respectively, Evertrust said.
Trading volume picked up a modest 4 percent in July, but retreated 15 percent last month in Greater Kaohsiung, with an average price of NT$154,000 per ping and NT$131,000 per ping, the broker said.
Self-occupancy — including first-time purchases and replacement needs — drove 67 percent of sales in Taipei, while asset allocations contributed 25 percent, Evertrust said, suggesting investors are fleeing the market.
The Ministry of Finance is considering basing property gains tax on market value, instead of much lower government-assessed values, after hiking house taxes in May.
The policy changes will increase holding costs and squeeze profit margins for property investors.
Taiwan Realty Co (台灣房屋) saw its trade shrink 10.2 percent last month from July, led by a 22.9 percent correction in Greater Kaohsiung. The gas pipeline blasts and torrential rain severely weakened sentiment in the municipality, the company said in a report.
Elsewhere, trading was mainly limited to small housing units that fell between NT$15 million and NT$20 million in Taipei and between NT$6 million and NT$12 million in New Taipei City, Taiwan Realty said.
The broker expects sentiment to remain weak due to the upcoming “nine-in-one” local elections on Nov. 29.