Property transactions could hold steady amid modest price declines next year as more presale projects and completed houses are due to enter the market, adding to selling pressures, Evertrust Rehouse Co (永慶房屋) said yesterday.
Property transactions are likely to total 270,000 units this year, a 10 percent increase from last year, but lower than the broker’s previous estimate of 275,000 units as growth momentum slackens this quarter due to a high base, Evertrust general manager Yeh Ling-chi (葉凌棋) told a news conference in Taipei.
Price concessions remain the key to property transactions, which could take a downturn if sellers refuse to concede, Yeh said.
“The large volume of presale and unsold houses make price increases unlikely, if not totally impossible, despite improving sentiment,” Yeh said.
Evertrust, the nation’s largest broker by number of offices, arrived at the conclusion after a quarterly poll showed 64 percent of people believe property prices have yet to bottom out.
The market is likely to stage an L-shape recovery and has not come out of the trough yet, Evertrust spokesman Jay Hsieh (謝志傑) said.
Presale and unsold houses of up to five years old are likely to amount to 121,000 units nationwide next year, suggesting heavy selling pressure ahead, Yeh said.
The pressure is heaviest in New Taipei City with 23,000 units on the market, followed by Taoyuan with 20,093 units and Kaohsiung with 18,697 units, Yeh said, citing government figures.
Developers and builders are likely to give top priority to digesting inventory or a supply glut would hurt prices for presale projects, Yeh said.
Developers have lowered the prices of presale units in areas near MRT Jiangzicui Station (江子翠) in New Taipei City and the strategy has proved successful, Yeh said.
The central bank might keep interest rates unchanged next year to support the economy as its peers in the US and elsewhere move to normalize monetary policy, he said, adding that widening interest rate spreads might prompt monetary policymakers to contemplate tightening measures.
Low borrowing costs would continue to lend support to the property market next year with a slim chance of any surprises, Yeh said, as the central bank could end its loose monetary policy in the second half of next year or in 2019.
Interest rate increases would raise cost burdens, making it more difficult for investors to cash out, he said.
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