Housing transactions might increase by at least 10 percent next year from this year, as sellers are expected to take profit and exit the market with the scrapping of the special sales levy, better known as the luxury tax, according to a quarterly survey released by Evertrust Rehouse Co (永慶房屋) yesterday.
Existing home deals might reach 300,000 units next year, up 11 percent from an estimated 270,000 units this year, as sellers might be more willing to make greater price concessions following the revocation of the luxury tax, the survey showed.
The levy, which applies to houses resold within two years of purchase, will cease to exist after new property taxes take effect next month.
“The tax rule change would allow sellers greater room to demonstrate pricing flexibility and could drive up supply by 100,000 units next year,” Evertrust assistant manager Chung Yin-lin (鍾穎麟) said by telephone.
A price correction of 10 percent nationwide is key to facilitating transactions that are likely to drop this year to the lowest levels since 2001, when the technology bubble bust depressed deals to 259,000 units, the survey showed.
About 70 percent of respondents said they believed home prices would fall next year, while 53 percent said they thought it would be unwise to buy new houses in the next six months, the survey indicated.
The findings suggest languid buying interest, Chung said, adding that house prices in the Greater Taipei area have dropped 10 percent in the past 12 months.
While steeper price corrections are unlikely in light of the ultra-low interest rates and excessive liquidity, the government might not take further action against the housing market next year, he said.
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