New home prices fall as builders reduce prices

By Crystal Hsu  /  Staff reporter

Sat, Oct 29, 2016 - Page 12

The new home market stabilized last quarter from a year earlier as builders lowered prices to facilitate transactions, a report by Cathay Real Estate Development Co (國泰建設) and National Chengchi University’s Taiwan Real Estate Research Center (台灣房地產中心) showed yesterday.

“Market sentiment improved a little bit last quarter after the central bank halted interest rate cuts last month, indicating the economy has stabilized,” the report said.

Developers and builders launched NT$136.9 billion (US$4.33 billion) worth of presale projects and new homes, shrinking 29.6 percent from a year earlier, the report said.

The continued shift to relatively affordable housing accounted for the retreat in total prospective sales value, as luxury homes have had difficulty finding buyers, the report said.

Mainstream housing — mostly apartments with one or two bedrooms — had an average price of NT$10.17 million, the report said.

That translated into an average asking price of NT$266,500 per ping (3.3m2), a 7.41 percent decrease from a year earlier, but a 0.39 percent rebound from three months earlier, the report said.

Price concessions stood at 17.37 percent, while the 30-day sales rate was 11.19 percent, it said.

A low base added to the quarterly improvement, as transactions remained light nationwide, the report said.

The trend is particularly evident in Taipei, where asking prices for new homes dropped to a five-year low, helping boost the 30-day sales rate to 10.62 percent last quarter, the report said.

While 30-day sales rates improved elsewhere, they remained below 10 percent in Tainan, the report said.

The research team said the market would likely continue to consolidate this quarter and beyond as policy uncertainty and expectation of prices linger.

Home owners have to pay more in land tax this year after the government raised land values by 30 percent on average to narrow the gap between market worth and assessed values for tax purposes.

The upward adjustments will affect 8 million homes in Taiwan, which will face heavier levies in line with the land value alterations, the Ministry of Finance said.

Land taxes, which are due next month, might generate more than NT$95 billion in revenue this year, an increase of 30 percent from last year, the ministry said.

The ministry adjusts assessed land value every three years.