The presale and new home market in northern Taiwan last month flashed “blue,” the fifth consecutive time that the signal hinted at a recession, as builders and developers opted to sit out the traditionally slow season, a report by the Chinese-language Housing Monthly (住展雜誌) said yesterday.
The market gauge stood at 27.1, down 4.6 points from one month earlier, with all sub-indices weakening except the room for price concessions, it found.
Presale projects totaled less than NT$20 billion (US$648.66 million), while the number of newly completed houses dropped to a two-year low of 200 units, reflecting tepid interest on the part of developers to launch new projects or boost sales, magazine research manager Ho Shih-chang (何世昌) said.
“The showing bucked the popular saying ‘rich or poor, it is better to buy a house over the Lunar New Year,’” Ho said, adding that fewer people bought houses before and after the holiday this year.
Developers used to encourage sales by providing buyers with free furniture or home decoration, but many departed from the practice this year, partly because they are less willing to concede and partly because the strategy is losing appeal, Ho said.
The decline in flexibility is evident from a drop in the number of advertisements to 11,300 and from firm prices, it showed.
“Prospective buyers share the observation that developers have grown increasingly tough,” Ho said.
The sub-indices on buying interest and transactions both fell in different parts of northern Taiwan, the report said.
The decline was most evident in Keelung and Yilan County, Ho said, adding that winter used to be the high season for the presale housing market in Yilan, but the seasonality no longer appears to hold in light of the bleak showing last year.
Hsinchu County and Taoyuan remained relatively stable, as improved affordability and better infrastructure supported relocation, he said.
Housing Monthly said it expects the indicator to continue to point to a recession this month, judging from a 30 percent plunge in buying interest thus far, Ho said.
A longer holiday allowed people to spend the Lunar New Year abroad, which was unfavorable for the local housing market, he said, adding that heightened uncertainty in the economy could also weaken confidence.
The market might be boosted next month when the spring sales season starts, Ho said.
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