Domestic housing market surges in spite of controls

By Crystal Hsu  /  STAFF REPORTER

Fri, Nov 19, 2010 - Page 12

Growth in the domestic housing market accelerated faster last month than in September as excess liquidity and low interest rates more than offset concerns over the central bank’s selective credit control, a survey showed, citing transactions in Taipei, Taichung and Kaohsiung.

Residential real estate transfers reached 4,864 units in Taipei City last month, an increase of 8.1 percent from 4,501 units a month earlier, although that marked a 12.3 percent drop from the same period last year, according to Sinyi Reality Co (信義房屋), the nation’s only listed real estate brokerage.

The housing turnover picked up 11.5 percent to 3,255 units in Taichung, advancing 9.7 percent from a year earlier, the report said. The number of units transferred in Kaoshiung totaled 2,308 last month, increasing 1.7 percent from September and 2.5 percent from the level a year earlier, the agency said.

“The housing market is regaining heat this quarter as evidenced by the statistics,” Sinyi senior researcher Stanley Su (蘇啟榮) said. “Ample funds and low capital costs weigh more on the market than concerns over selective credit tightening.”

Su expects the market’s momentum to last through the Lunar New Year, spurred by demand from young people who plan to tie the knot.

Cautious sentiment, however, has yet to fully dissipate as transactions in Taipei City lagged behind their level the previous year by 12.3 percent. Taipei accounts for more than 50 percent of housing transactions nationwide.

Su attributed the slowdown partly to the special municipality elections on Nov. 27, as some investors are opting to stay on the sidelines until after the polls before naking their next moves. Su said the elections would have a limited impact on housing prices in the municipalities in the near term.

Housing transactions surged 59 percent last month from a month earlier in Taipei’s Xinyi District (信義) attributable to the recent openings of Taipei City Hall Bus Station and the adjacent Uni-President Hankyu Department Store (統一阪急百貨), Sinyi said. Zhongzhen District saw the next-highest transactions figure, with a 37.7 percent increase thanks to good transport links and leading schools.