Fri, May 06, 2016 page13

• Housing market to warm up: survey

  HANDOVER: Many are waiting for the May 20 change in government, which explains why 45.4 percent of respondents plan to buy homes in the second half, an analyst said

  • By Crystal Hsu / Staff reporter
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  Housing transactions might improve in the second half of this year, as 45.4 percent of Taiwanese plan to buy homes in the coming six months according to a recent poll, an increase of 10 percent from a year earlier, Taiwan Realty Co (台灣房屋) said yesterday.

  However, the survey found most respondents expect home prices to drop by 10 percent, with the global economy and government policies cited as the greatest downside risks, the company said.

  “Buying interest picked up noticeably after the central bank on March 24 lifted mortgage restrictions on houses in Taipei and New Taipei City,” Taiwan Realty manager Jack Chou (周鶴鳴) told a news conference.

  The central bank’s move suggested a shift to a neutral stance after a series of credit controls and unfavorable policies last year sent housing transactions to a record low since the bust of the technology bubble in 2001, Chou said.

  The economic weakness in Taiwan and abroad merits measures to spur GDP growth and continued tightening would counter such efforts, Chou said.

  Cautious sentiment would subside after the change in governments on May 20, which explains why 45.4 percent of respondents voiced plans to buy houses in the second half, Chou said.

  The figure represents a 10.2 percent increase from a year earlier, according to the survey of 1,073 respondents between April 6 and May 3.

  Still, the incoming government could derail the recovery if it fails to handle cross-strait ties in a wise fashion or introduces tax hikes that soften market confidence, Chou said.

  “The state coffers would benefit from more tax revenue if the housing market recovers,” Taiwan Realty said in the survey.

  New policymakers in the incoming administration of president-elect Tsai Ing-wen (蔡英文) have floated ideas of raising inheritance and gift tax rates by 10 percent to fund long-term care in coping with the nation’s rapidly aging population.

  Government policies sit atop the list of concerns for 40 percent of respondents, trailing world economy concerns cited by 41 percent, the survey said.

  Infrastructure facilities and interest rates also rank high in affecting market performance, the survey said.

  Policy uncertainty apart, pricing differences might continue to slow transactions if buyers and sellers remain at loggerheads.

  About 42 percent of respondents said they expect home prices to decline 10 percent, while 18.3 percent said they are looking at sharper corrections, the survey said.

  Thirty-four percent said housing prices might hold steady and a modest 5.9 percent expect an increase.

  The findings suggest a need for price concessions, with 55 percent unwilling to enter the market in the foreseeable future, Chou said.

  Real demand from first-time buyers and asset allocation needs might sustain the market where speculators have fled because of drastic holding and trading tax hikes, he said.
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