A sharp decline in the number of housing transactions in August reflected the country’s sluggish economy, an academic said on Saturday.
Chuang Meng-han (莊孟翰), an industrial economics professor at Tamkang University, said the global economy has remained lethargic and that a third round of quantitative easing in the US has not produced the intended effect.
“Declining housing transactions only reflect the fundamentals of the economy,” Chuang said.
The nation’s economy is expected to grow more than 1.5 percent this year, but is unlikely to surpass 2 percent, the director of the center for economic forecasting at the Chung-Hua Institution for Economic Research (中華經濟研究院), Liu Meng-chun (劉孟俊), said yesterday.
The Taipei-based think tank is expected to update its economic forecasts for this year tomorrow. In July, the institute predicted the economy would expand 2.36 percent this year.
In August, the government downgraded its GDP forecast for this year to 1.66 percent from its previous estimate of 2.08 percent, due to weakening global demand.
Last week, the Ministry of Finance reported last month’s exports ended six straight months of declines, rising 10.4 percent year-on-year, but the total exports in the first nine months were still 3.9 percent lower than the year before.
Chuang said the government should not try to buoy up the real- estate market to let investors and life insurance companies speculate on the market.
Instead, the government should let the housing market cool down to prevent the property bubble from bursting, he added.
According to the latest statistics compiled by the Ministry of the Interior, housing transactions in August declined by 8,980 units, or 26 percent, from the previous month.
However, associate manager of Evertrust Rehouse Co (永慶房屋) Jeffery Huang (黃增福) said the decline in transactions last month was mainly due to the government’s implementation in August of a new and more transparent property registration mechanism for real estate transactions.
Huang also attributed the decline to the advent of “Ghost Month,” that saw prospective buyers staying on the sidelines.
“Ghost month” is traditionally a slow time for major transactions of all kinds.
Huang predicted that sales will gradually pick up, given that the interest rate is still low.
In the Greater Taipei area, transactions are forecast to grow 20 percent this month from last month, Evertrust general manager Yeh Ling-chi (葉凌棋) said on Thursday.
Additional reporting by Crystal Hsu