Real-estate prices dropped an average 4.1 percent across the nation last year, with homes in the greater Taipei area registering the steepest declines, Sinyi Realty Inc said in a report yesterday.
The nation’s only listed broker’s housing price index was 280.6 for the fourth quarter of last year, down 4.1 percent from 292.6 for the same period in 2014, led by corrections in the greater Taipei area — which had seen prices rise to the extent most people could not afford to buy a property, the report said.
In Taipei, home prices fell 6.9 percent, meaning houses valued at NT$20 million (US$593,032 at current exchange rates) in 2014 cost NT$1.38 million less last year, Sinyi researcher Tseng Chin-der (曾進德) said in the report.
The price decline came after government-imposed holding tax hikes and credit controls that have hit the market for expensive properties.
“The pace of the retreat is actually more than 10 percent in Taipei, if price levels are compared with mid-2014, and challenges the popularly held belief that houses in central locations hold prices more than those in suburban and outlying areas,” Tseng said.
The housing index shrank 4.3 percent in New Taipei City and 5.5 percent in Taoyuan, the report indicated.
DIRE WARNING
Pundits had forecast price corrections of between 10 and 20 percent for houses in emerging districts of northern Taiwan due to oversupply and decreasing demand.
The forecasts might still turn out to be correct if price corrections extend to other parts of Taiwan, Tseng said.
For the time being, housing prices have remained stable in central and southern Taiwan, the report said.
The housing price index gained 2.3 percent in Hsinchu and increased 0.1 percent in Taichung, while the gauge picked up 1.9 percent in Kaohsiung, the report said.
Sinyi attributed the modest advance to relative affordability, but voiced concern over a price downturn in light of a sluggish rate of transactions.
All eyes will be on the spring sales season that starts in late March and runs through April, as many builders and developers opted to stay on the sidelines in the second half of last year to avoid political uncertainty, Tseng said.
“The upcoming sales season will show if they have recovered confidence now that the elections are over,” the analyst said.
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