Existing home transactions in major cities declined 25 percent last month from a year earlier, suggesting the market has yet to hit the bottom, as new property tax measures are expected to clear the legislature tomorrow.
Housing transactions in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung — which accounted for about 80 percent of sales nationwide — totaled 17,199 units last month.
The figure is the lowest for the same month since the government started the survey in 1999, as prospective buyers turned more conservative ahead of the legislature’s adoption of new property tax plans.
Legislative Speaker Wang Jin-pyng (王金平) is to host a cross-party discussion on the property tax bill today, so it might be passed by the legislature tomorrow, Minister of Finance Chang Sheng-ford (張盛和) said.
Chang said he was confident over the bill’s smooth passage and that he was to join the discussion to clarify any misunderstandings and rally support.
The bill would levy an income tax rate of between 15 and 45 percent on gains from property transactions in excess of NT$4 million (US$129,360) depending on the length of ownership.
If approved, the new taxes will take effect next year, but will not affect homes already purchased.
Housing transactions in Taipei shrank 33.2 percent year-on-year to 2,151 units last month, while those in New Taipei City fell 34.9 percent to 3,911 units, according to information on the two city governments’ Web sites.
Housing transfers stood at 3,004 units in Taoyuan and 3,416 units in Taichung, representing a retreat of 31 percent and 13.8 percent respectively, according to the two Web sites.
“The market has not yet come out of the woods, judging from the sluggish trading,” Evertrust Rehouse Co (永慶房屋) spokesman Andy Huang (黃舒衛) said.
The trend will put pressure on sellers to lower prices as prospective buyers refuse to raise their offers, Huang said.
However, sellers in general have not budged much, due to ample liquidity and low borrowing costs, he said.
Transactions also fell 15.9 percent year-on-year to 1,611 units in Tainan and 16.1 percent to 3,106 units in Kaohsiung, government data showed.
However, on a sequential basis, the figures were up 5.4 percent and 13.8 percent respectively from April. Evertrust attributed the increase to relative affordability in the southern cities.
The weak sentiment is likely to persist for a while until the market assimilates the impact of new property taxes after the legislature gives its go-ahead, Huang said.
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