Housing market trading stays sluggish

SLOW GOING::City governments’ data showed below-average trade volumes, except in Taipei, and prospective buyers are expected to remain cautious, analysts predicted

By Crystal Hsu  /  Staff reporter

Wed, Oct 02, 2013 - Page 14

The housing market saw an extended period of sluggish trading last month on general weak confidence, although sales in Taipei regained some momentum, separate city government data showed yesterday.

Home transactions picked up 15 percent to 3,141 units in Taipei last month, compared with August, as self-occupancy needs continued to sustain trading of small apartments, according to the city government.

Tseng Ching-der (曾敬德), a researcher at Sinyi Realty Inc (信義房屋), the nation’s only listed broker, said that the volume remains below the monthly average of 3,304 units for the past year, suggesting a soft market.

“The market has yet to emerge from the low season” generally attributable to the lunar Ghost Month falling between Aug. 7 and Sept. 4 this year, Tseng said in a note.

The US Federal Reserve’s reported plans to taper off quantitative easing, and domestic political wrangling between the Presidential Office and the Legislative Yuan deepened worries, Tseng said.

In New Taipei City (新北市), housing transactions shrank 10 percent to 6,295 units last month, from 6,959 in August, government statistics indicated, as prospective buyers preferred to wait and see how unfavorable factors pan out.

Greater Taichung and Greater Tainan saw transactions retreating 2 percent and 3 percent respectively to 4,409 units and 1,589 units last month, compared with 4,477 units and 1,635 units respectively one month earlier, the separate city governments said.

The market will need some time to digest mixed cues, after the Fed decided last month to keep its asset purchasing program intact, while Taiwan’s central bank Governor Perng Fai-nan (彭淮南) last week warned against an interest rate turnaround in the future, Evertrust Rehouse Co (永慶房屋) associate manager Jeffery Huang (黃增福) said.

The assurance of liquidity failed to lift transactions so far and prospective buyers may turn more cautious on expectations of higher borrowing costs, Huang said.

The cautious sentiment would slow the pace of migration from Taipei City to less expensive housing in New Taipei City or Taoyuan County, Evertrust said.

Taiwan Realty Co (台灣房屋) is less pessimistic, saying the market may stage a comeback toward the end of the year on the back of real demand.

The legislature is likely to stave off reviewing a bill to tighten the special sales levy, weakening its impact on the market, Taiwan Realty manager Jack Chou (周鶴鳴) said.