About 66 percent of Taiwanese expect housing prices to decline next quarter, up 5 percentage points from a survey three months ago, as suggestions of unfavorable polices deepen caution and are likely to drag this year’s transactions down to a record low, Evertrust Rehouse Co (永慶房屋) said yesterday.
“Buying interest improved modestly last quarter after the central bank eased mortgage restrictions, but subsided again this quarter,” Evertrust general manager Yeh Ling-chi (葉凌棋) told a news conference in Taipei.
The nation’s largest broker by number of offices attributed the retreat seen in its latest survey to talk of housing tax hikes, from luxury to homes that are 15 years old or older, Yeh said.
The softening trend may persist for the rest of this year as the government appears inclined to raise holding taxes, even though it is hesitant to do so in a drastic manner, Yeh said.
Evertrust has trimmed its forecast for transactions this year to a range of between 230,000 units and 240,000 units, down by 15,000 units from the estimate it made three months ago.
The revision was prompted by lackluster volume, which stood at 133,000 during the first seven months of the year and is likely to approach 100,000 for the rest of the year, Yeh said.
Interest rate cuts, while helping lower mortgage burdens, have proved ineffective in invigorating the market, Yeh said.
It would not matter if the central bank lowers borrowing costs again at its policy review meeting on Thursday or leaves them unchanged, what prospective buyers really want are greater price concessions, he said.
A majority of would-be buyers voiced a willingness to close deals if sellers lower prices 15 percent below transaction data listed on the government’s Web site, Evertrust spokesman Lin Tai-lung (林泰隆) said, citing the firm’s quarterly survey.
Housing prices have dropped 13 percent in Taipei, compared with a peak in 2014, while trading plummeted 71 percent, the survey found.
Home values weakened 15 percent in New Taipei City while transactions fell 64 percent, the survey showed.
The pace of price correction is less drastic in Taoyuan at 8 percent, while it is 5 percent in Hsinchu and 6 percent in Taichung. Home prices edged down only 2 percent in Tainan and 5 percent in Kaohsiung.
The presale market may help push down existing home prices after a few developers set price tags significantly lower than market rates to attract buyers, Lin said, adding nearly a majority of the respondents expressed interest in such projects.
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