Mon, Jan 01, 2018 - Page 16 News List

Luxury housing market slumps, no recovery expected

By Chen Cheng-hui  /  Staff reporter

The nation’s luxury housing market is expected to remain lackluster this year, as upcoming local elections and a continued freeze in cross-strait relations are likely to keep buyers at bay, Master Real Estate Co Ltd (大師房屋) said on Thursday.

Luxury house transactions have declined steadily over the years, as the segment is more closely related to the nation’s political and economic situations than other sectors in the property market.

There were 70 transactions in 2010, but only 11 last year, according to tallies compiled by Master.

“Luxury homes are not a necessity, so what the market pays attention to is the macro-environment,” the Chinese-language Apple Daily quoted Master chairman Simon Chen (陳建慶) as saying.

The “macro-environment” refers to the dynamics of political and economic developments, which do not show any support to the luxury-home market, Chen said.

Bickering between the pan-blue and pan-green camps has continued, while dialogue across the Taiwan Strait has stalled, Chen said.

Meanwhile, despite the TAIEX’s rally above 10,000 points for several months, most people do not feel they have benefited, because the market is concentrated on a few heavyweight stocks on the back of institutional investors, he said.

The government’s housing policies, such as collecting a property tax based on market value and imposing property taxes on owners of luxury homes, as well as the central bank’s decision to maintain its selective credit controls on luxury homes, also weighed on the segment, he added.

Citing Master’s data, Chen said that the Royal Castle (皇翔御琚) development, launched by Huang Hsiang Construction Co (皇翔建設) in Taipei’s Xinyi District (信義) five years ago, has only sold one-third of its housing units thus far.

Other luxury housing projects, such as Ruentex Development Co’s (潤泰創新) Song Tao Yuan (松濤苑) in Taipei’s Boai Special District (博愛) and Sherwood Residence (西華富邦) in the city’s Dazhi (大直) area, also saw sales momentum lose steam, he said.

With expected new supply, including Yuanlih Construction Enterprise Group’s (元利建設) Peace Palace (和平大苑) and One Park Taipei (信義聯勤) in Taipei’s Daan District (大安), as well as upcoming local elections, the luxury home market is not expected to recover by the end of this year, the broker said.

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