Builders and developers put a large number of houses on the market last quarter, pushing prices to a record high despite sluggish sales, a survey by Cathay Real Estate Development Co (國泰建設) showed.
New construction totaled NT$369.2 billion (US$12.1 billion), or 22,184 units, between July and September, according to a survey jointly conducted by National Chengchi University’s Taiwan Real Estate Research Center.
That represented the fourth and third-highest figures respectively in the history of the survey, as the supply side seeks to take advantage of existing building permit regulations that are to become stricter next year.
“The trend might continue well into next year until builders and developers have divested all the permits they have in hand,” Takming University of Science and Technology professor Hua Ching-chun (花敬群) said on behalf of the research panel.
Average housing prices rose to a new high of NT$299,100 per ping (3.3m2) nationwide in the second quarter even though 30-day sales rates plunged to 12.09 percent, from above 20 percent in the past, the quarterly survey showed.
Hua attributed the sluggish transactions to policy uncertainty and voiced grave concern over oversupply in some districts, especially in New Taipei City.
The volume of new construction hit NT$148 billion, or 9336 units, in New Taipei City, a rise of 34.3 percent from the figure recorded three months earlier, and an increase of 8.5 percent year-on-year, the survey found.
New home prices averaged NT$383,400 per ping in New Taipei City, while 30-day sales rates stood at 11.42 percent, the survey showed.
Chang Ding-hsuan (章定瑄), a finance professor at Jinwen University of Science and Technology, said that 60 percent of the new projects are concentrated in Taipei’s Tamsui (淡水) and Sinjhuang (新莊) districts, where there are relatively many unoccupied houses and utility usage is low.
“That suggests a heavy presence of property investors rather than buyers with real demand,” Chang said, adding that houses in such districts are prone to price corrections once the market heads south.
New construction amounted to NT$64.8 billion in Taipei, or 1,194 units, representing an increase of 1.1 percent from the previous quarter and 21.7 percent from a year earlier, with average prices of NT$804,300 per ping, the survey said.
The latest data lent support to stable demand for houses in the capital, making price corrections difficult, Hua said, adding that sales rates of 17.43 percent marked the highest among all administrative districts.
“Builders and developers appear unfazed by plans to impose higher tax burdens on property gains although uncertainty over government policy is chilling the market,” Hua said.
Sellers might calculate that tough election campaign rhetoric would not become law once the elections are over, Chang said.
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