Property transactions fall amid caution

UNCERTAINTY::Major real-estate brokers attributed it to the Federal Reserve’s plan to cut its debt-buying program and concern that it could trigger a liquidity flight

By Crystal Hsu  /  Staff reporter

Sat, Jun 29, 2013 - Page 13

Major domestic real-estate brokers saw their transactions drop between 4 percent and 12 percent this month from last month, as buyers turned cautious after the US Federal Reserve signaled plans to wind down quantitative easing.

Overall property deals at Sinyi Realty Inc (信義房屋), the nation’s only listed broker, fell 4 percent this month, with transactions in Greater Taipei posting a larger 10 percent drop, as buyers in the area are more sensitive to volatility in international financial markets, the company said in a statement.

“The recovery seen in the first quarter shows signs of a slowdown in the second quarter as concerns over liquidity deepened,” Sinyi researcher Tseng Chin-der (曾敬德) said in the statement.

Transactions in Hsinchu and Greater Taichung dipped 8 percent and 9 percent respectively this month, but rose 10 percent in Greater Kaohsiung as property funds continued to move south, Tseng said.

Despite the correction in volume, housing prices were virtually unchanged at NT$655,000 per ping (3.3m2) in Taipei and NT$335,000 per ping in New Taipei City (新北市), and rose 2.7 percent to NT$187,000 per ping in Greater Taichung, according to Sinyi.

Evertrust Rehouse Co (永慶房屋), the nation’s largest broker by number of offices, reported double-digit percentage falls across the nation except for Taipei, the company said in a statement.

Transactions shrank 6 percent in the capital this month from last month and retreated 13 percent in New Taipei City and Greater Taichung, the statement said, adding that the fall accelerated to 16 percent in Greater Kaohsiung.

Evertrust spokesman Andy Huang (黃舒衛) attributed the corrections to growing uncertainty about the macroenvironment, adding that buyers needed more time to digest recent developments.

Apart from the Fed’s plans, the recent signing of a cross-strait service trade agreement and upcoming revision of the special sales levy will also affect buying decisions, Huang said.

“A turnaround in monetary policy following the exit of hot money poses the biggest worry to the property market as it will increase mortgage burdens,” Huang said.

Buyers should weigh risks before making a move, although real estate has proven to be the best investment tool based on past experience, Huang said.

H&B Realty Co (住商不動產) saw transactions drop 11.7 percent this month from last month, the company said.

H&B spokeswoman Jessica Hsu (徐佳馨) attributed it to cooling investment interest amid reports of a liquidity flight.

Many buyers also preferred to wait and see because of a shortage of supply in popular locations, Hsu said.

Taiwan Realty Co (台灣房屋) fared better, as the company reported a drop of only 0.45 percent in monthly trading volume.

The company said the Fed’s policy would have little impact on the local market, which is likely to continue recovering after the central bank on Thursday kept domestic borrowing costs unchanged.