New developments, high liquidity could boost home market

TIMING::According to a realtor, property developers tend to unveil projects in late September to lure buyers to the market after the end of Ghost Month

Staff writer, with CNA

Mon, Oct 08, 2012 - Page 13

The property market will likely get a boost next quarter from the launch of several new developments and the high level of liquidity in the market, a real estate broker said on Saturday.

After the US Federal Reserve started a third round of quantitative easing (QE3) in the middle of last month, putting upward pressure on consumer prices, investors have tended to move their funds to property assets in a bid to counter rising inflation, Sinyi Realty Inc (信義房屋) said.

Beyond investors’ search for a hedge against inflation, an inflow of funds from the program is also expected to drive growth in the domestic property market in the fourth quarter, the realtor said.

QE3 PROGRAM

Under the QE3 program, the US central bank is aiming to buy US$40 billion in mortgage-backed securities from the market every month for however long it deems necessary.

The QE3 program combined with the Fed’s existing bond-buying maneuvers means the US central bank will pump about US$85 billion into the market a month, creating a spillover effect in Asian markets.

Sinyi Realty said that with optimism over Taiwan’s property market on the rise, construction companies launched NT$57.9 billion (US$1.98 billion) and NT$60.9 billion worth of residential developments in Taipei and New Taipei, respectively, late last month.

NEW PROJECTS

The realtor said the value of the newly unveiled projects was the highest it has been in the two metropolitan areas during the same period in recent years.

Local property developers tend to unveil new projects in late September in an attempt to lure potential homebuyers back to the market after the end of Ghost Month on the Lunar calendar, which fell from Aug. 17 to Sept. 15 this year.

Many consumers have a habit of putting on hold plans for buying big-ticket items, such as cars and homes, during Ghost Month to avoid bad luck.

BUYING INTEREST

Sinyi Realty said the number of potential homebuyers who visited sales offices for the new projects last month rose 10 percent from August, indicating a recovery of buying interest in the domestic property market.

In particular, many potential home buyers have expressed interest in developments located in some districts in New Taipei, such as Xizhi (汐止), Wugu (五股), Luzhou (蘆洲) and Tamshui (淡水), where home prices are considered to be relatively affordable, the realtor said.

UPBEAT

It said property developers are more upbeat about property sales in the greater Taipei area because of relatively strong demand. The projects unveiled late last month have been watched closely by market observers and are expected to serve as barometers of the domestic property market, Sinyi Realty said.