Thu, Dec 20, 2018 - Page 12 News List

Housing sales likely steady: broker

By Crystal Hsu  /  Staff reporter

Housing transactions might hold steady or inch up next year as the economy abroad and at home slows, but a low-interest environment would lend support, Evertrust Rehouse Co (永慶房屋) said yesterday.

The number of home deals are forecast to fall within a range of 280,000 to 290,000 next year, about the same as this year, while housing prices continue to consolidate, Evertrust general manager Yeh Ling-chi (葉凌棋) said.

Property transactions stood at 254,483 nationwide in the first 11 months of this year, a 5.6 percent increase from the same period last year, and could gain an extra 25,000 this month in line with the monthly average, Yeh said.

The growth pace is expected to lose some steam next year, as the US-China trade friction dampens GDP growth and upsets financial markets around the world, he said.

“Weak corporate confidence and negative wealth effect are unfavorable to the property market,” he said.

However, sufficient liquidity and low interest rates could lend support to the property market, which has proven to be less volatile compared with stocks, mutual funds and other assets, he said.

The central bank is most likely to hold policy rates unchanged at its quarterly board meeting today, Yeh said, adding that the impetus for a rate hike has vanished as the US-China dispute starts to take a toll on corporate earnings and dims business outlook.

The adverse effect would grow more evident next year unless Washington and Beijing iron out their differences on the negotiation table, Evertrust said.

Interest rates sit atop the list of concerns among prospective home buyers, the broker’s quarterly survey showed.

A low-interest environment would give sellers room to stick to their pricing levels rather than to make concessions to facilitate deals, Yeh said.

About 45 percent of respondents expect home prices to fall next quarter, down 3 percentage points from three months earlier, the poll found.

Evertrust attributed the resilience to 33 percent of respondents favoring real-estate property as a risk-hedging tool.

“This preference explains why property prices have been relatively firm in bad times,” Yeh said.

Evertrust warned against a supply glut next year and beyond in light of the fast advance in building permits, which could turn into heavy selling pressure.

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