Home prices in Taipei fell 1.2 percent last year from a year earlier, but the market has shown signs of stabilization this year as evidenced by a sharp increase in transactions last quarter, global real-estate consultancy Knight Frank said in a survey released last week.
Taipei’s decline bucked the average price increase of 6.6 percent for 150 global cities tracked by Knight Frank and earned Taipei the 133th berth on the company’s market sentiment ranking, the quarterly survey showed.
Taipei’s performance was better than Singapore’s 2.6 percent fall and Russia’s 15 percent price correction, the survey said.
Nine Chinese cities made the top 10 list last year, with Nanjing taking first place with a 41.1 percent price increase, the poll found.
Taipei home prices edged down 0.5 percent during the October-to-December period, easing from 4.9 percent in the third quarter of last year and 5.8 percent in the second quarter, Knight Frank’s Taipei-based research associate director Andy Huang (黃舒衛) said on Friday, adding that the number of transactions shrank 28 percent for the whole of last year from 2015.
The figures suggest signs of stabilization, especially for non-luxury houses, Huang said.
Prices for average apartments with elevators picked up 2.3 percent in the final quarter of last year, while older apartments without elevators dropped 2.2 percent, despite the government’s efforts to encourage urban renewal, he said.
That suggests that the worst might have been over, but it is too early to speculate on a concrete recovery, he said.
The 30.6 percent surge in transactions during the January-to-March period lent support to the likelihood of a stabilizing market.
Despite the rebound, the number of deals constituted only 50 percent of the level in 2011 prior to the introduction of luxury tax, Huang said,
“As long as investors stay on the sidelines and real demand underpins the market, conservative sentiment would linger as seen by the below-par price for a foreclosed apartment in The Palace (帝寶),” once Taiwan’s most expensive residential complex, he said.
Evertrust Rehouse Co (永慶房屋), the nation’s largest broker by the number of offices, said the recovery in transactions might extend through the year, but the pace might slow from this quarter, due to an ultra-low base in the first quarter of last year.
Cushman & Wakefield Inc, another international consultancy, said the housing market would remain soft unless transactions recover to 300,000 units per year, far from the record last year.
Taiwan Realty Co (台灣房屋) said the nation’s property market has entered into an era where transactions would hover around 250,000 to 260,000 units per year, due to unaffordability and a shrinking population.
That helps explain why apartments with two bedrooms have rapidly gained popularity, replacing three-bedroom apartments as the mainstream product for the first time last year, Ho Shih-chang (何世昌), research manager for Chinese-language Housing Monthly (住展雜誌), said last week.
Unaffordability is especially evident in Taipei where housing ownership is untenable for most Taiwanese households with double incomes, Ho said.
Consequently, two-bedroom apartments account for 47 percent of presale projects and new homes in Taipei last quarter, twice as many as three-bedroom apartments, as builders and developers have sensed the shifting taste among buyers, he said.
Small apartments have lower costs and are easier to find buyers for, he added.
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