The housing market is likely to pick up mildly next year on the back of favorable policies, but prices might continue to fall due to heavy selling pressure, Evertrust Rehouse Co (永慶房屋) said yesterday.
“Housing transactions might rise between 3 percent and 5 percent next year, from a likely record low of 245,000 units this year, as the government has signaled plans to facilitate urban renewal projects,” Evertrust general manager Yeh Ling-chi (葉凌棋) told a news conference in Taipei.
Policymakers have suggested allowing owners of older properties to gain more space if they agree to participate in urban renewal projects, as 45 percent of existing homes nationwide are more than 30 years old, raising safety concerns.
The incentives could also include holding tax discounts for homes intended for self-occupancy and favorable floor area ratios to encourage homeowners and developers to participate in urban renewal, Ministry of the Interior officials have said.
“The proposed package would help to remove roadblocks to urban renewal without fueling housing prices,” Yeh said, adding that owners of older properties have resisted renewal efforts over fears they would lose space and be subject to higher taxes for new homes.
The government proposed the urban renewal legislation in a bid to enhance building safety and stimulate the economy.
Nearly 80 percent of homeowners expressed willingness to participate in urban renewal programs if they could retain the size of their living space, an Evertrust survey found.
Homes 30 years or older constitute 64 percent of homes in Taipei and 46 percent in Kaohsiung, suggesting the two municipalities would benefit the most from urban renewal initiatives, Yeh said.
Until the legislation is enacted, unaffordability and correction expectations might continue to weigh on the market, Yeh said, but added that the pace of the decline eased this year from last year.
An estimated 117,000 new homes from earlier presale projects could enter the market next year, increasing supply and the pressure for price concessions if sellers are anxious to cash out, he said.
However, 58 percent of respondents said it would be unwise to buy homes in the next six months unless sellers lower prices to as much as 15 percent less than figures listed on the government’s transaction Web site, Evertrust spokesman Lin Tai-lung (林泰隆) said, citing a survey by the firm.
Most sellers, 62 percent, refuse to concede that much, due to low interest rates and plans to lease homes, the survey found.
Real-estate investment was tied with stock markets as the most popular investment tool among Taiwanese, the survey showed.
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