Home-buying interest has picked up 10 percent as sellers are more willing to adjust prices in an effort to avoid higher tax burdens on property ownership or gains that are set to be implemented next year, a survey by U-Trust Realty Co (有巢氏) said yesterday.
The number of prospective buyers has grown 10 percent nationwide one month after the passage of the property tax, although transactions remain weak due to lingering cautious sentiment, U-Trust spokesman Liu Ping-yao (劉炳耀) said.
“People are more willing to make inquiries or offers now that the tax issue is settled,” Liu told a media briefing.
Properties that would be for self-occupancy account for more than 74 percent of expressions of interest, as investors flee the property market in the face of growing tax burdens, the survey said.
From next year, property gains are to be subject to income taxes of between 15 percent and 45 percent depending on the duration of ownership.
The tax rate is a flat 17 percent for corporate sellers, but 45 percent for foreign firms if the property is sold within one year of purchase, and 35 percent if ownership is longer.
About 46 percent of prospective buyers are looking at houses priced between 10 percent and 20 percent lower than what is listed on the government’s real-price registration Web site, the survey said.
Selling pressure varies in different parts of Taiwan, but most sellers want to cash out before the higher taxes are imposed, the survey said.
Nearly 70 percent of sellers in northern Taiwan have said they are prepared to accept offers that are 10 percent below the asking price, the survey said.
Liu attributed the trend to soaring home prices and oversupply in Taipei, New Taipei City and Taoyuan.
Houses in New Taipei City’s Tucheng District (土城) declined 2.5 percent last month and dropped by 8 percent in Taoyuan, Chen Hung-sheng (陳宏勝), another U-Trust manager said, citing government statistics.
In Taichung, sellers are prepared to lower prices by 24 percent for houses in less popular districts and by 9 percent in central districts, the survey said.
In Kaohsiung, 67 percent of sellers are willing to adjust house prices by an average of 10 percent, the survey found.
The pricing flexibility is an indicator that property transactions might rebound in the second half, the survey said.
Still, home transactions might drop below 300,000 this year, the lowest level since the technology bubble burst in 2001, as political uncertainty heightens ahead of the presidential and legislative elections in January next year, the survey said.
In related news, Chong Hong Construction Co (長虹建設) chairman Lee Wen-tsao (李文造) said Chong Hong and its peers might lower home prices by between 10 percent and 20 percent if they do not import expensive building materials from abroad.
In recent years, building companies have developed residential projects with materials intended for luxury hotels, which has significantly raised their costs, Lee said.
Chong Hong plans to refrain from that strategy and seek land in less-expensive locations, Lee said.
Lee dismissed talks of a property bubble, saying ample liquidity and lower borrowing costs would lend support to the property market.
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