Housing transactions in Taipei City fell by more than 20 percent last month, the result of a new policy requiring the actual prices of real-estate transactions to be made public, local real-estate brokers said yesterday.
Statistics released on Monday by the city government’s Department of Land showed that 3,317 commercial and residential units were sold last month, down 21.3 percent from the 4,215 units sold last month.
“Now it is back to the fundamentals,” said Jessica Hsu (徐佳馨), director of the research division at H&B Realty (住商不動產).
Although the new policy, which took effect at the beginning of last month, had an adverse effect on Taipei’s housing market in the month, “it is beneficial to the housing market in the long run,” Hsu said.
Previously in Taiwan, the prices at which residential and commercial units were sold were not made public or reported to the government, creating an information gap that enabled speculators and developers to manipulate prices in the marketplace.
Hsu said that with the new transparency rule closing this information gap, buyers are expecting prices to edge lower, explaining their reluctance to jump into the market before price trends become clear.
Only three of Taipei’s 12 administrative districts saw increases in property transactions in August.
Wanhua District (萬華) posted the biggest gains, with transactions rising 119.51 percent to 540 units.
That was well ahead of Beitou District’s (北投) 34.98 percent increase, with 301 units sold, and Zhongzheng District’s (中正) 34.78 percent increase, with 186 units sold, the statistics showed.
Hsu attributed the dramatic growth in Wanhua District to the higher settlement of pre-sale home cases, but she said the figure is very likely to cool down in coming months.
Looking ahead, Hsu predicted steadier growth in transactions in the final quarter of the year as potential buyers gain confidence in the local property market.
Another factor that may have played on the minds of potential buyers in August, Hsu said, was the possibility of higher tax liabilities in the future.
Property taxes and land value increment taxes (a form of capital gains tax) in Taiwan are not currently assessed on actual transaction prices, because the prices are not transparent.
Instead, they are assessed on government estimates of land and housing values, which are usually far lower than market values.
In the future, however, as more transactions are recorded publicly, the central and local governments may decide to tax property based on the actual transaction price, adding to property owners’ tax burdens.