The new home market indicator flashed “yellow-blue” last month, from the “blue” signal in November, as developers and builders launched pre-sale projects, but buyers remained hesitant, the Chinese-language Housing Monthly (住展雜誌) magazine said yesterday.
The sentiment gauge last month suggested the market was shifting gears after hitting rock bottom in November, as evidenced by a sharp increase in new construction volume in northern Taiwan from NT$20 billion to NT$65 billion (US$625.806 million to US$2.03 billion), publication research manager Ho Shih-chang (何世昌) said.
“The volume increase reflected an increase in confidence on the part of the supply side following the nine-in-one elections,” Ho said by telephone.
That accounted for the introduction last month of pre-sale projects in Taipei’s Xinyi (信義), Beitou (北投) and Zhongshan (中山) districts, as well as New Taipei City’s Sangchong (三重), Sijhih (汐止), Sinjhuang (新莊) and Yonghe (永和) districts, Ho said.
Keelung, Taoyuan and Hsinchu also saw new pre-sale projects, the magazine said, which limited its survey to northern Taiwan as it accounts for 70 percent of pre-sale projects nationwide.
Many of the new projects had been talked about, but delayed due to the Nov. 29 nine-in-one elections last year, Ho said, adding that some developers had decided it was time to push ahead with projects from last month onward.
The demand side failed to share the improved confidence, and the number of potential buyers and transactions remained similar to November, the magazine said.
The Chinese Nationalist Party’s (KMT) resounding defeat in the elections deepened expectations of price falls, as many believe that growing housing unaffordability contributed to the KMT’s trouncing at the polls, Ho said.
New administrators have promised to address the issue and many take Taipei Mayor Ko Wen-je (柯文哲) seriously, Ho said.
“Ko’s no-nonsense and efficient business style raises concerns that he might take drastic measures against the property market, with other mayors following his lead,” Ho said.
So far, pre-sale home prices have showed little change though builders and developers have refrained from setting prices unreasonably high, Ho said.
The index on price concession stayed unchanged for three months running at 5.12 last month, the magazine said.
“There is a 10 percent gap between buyers and sellers over house values, which will continue to stall transactions if neither side is willing to make adjustments,” Ho said.
The business indicator might flash “yellow-blue” again in coming months due to seasonal slowdown this month and next month, Ho said, adding that people tend to avoid making purchases ahead of the Lunar New Year.
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