The nation’s real-estate index flashed a yellow-red light in the fourth quarter, suggesting the sector is flourishing, but developers and brokerages are bearish about the outlook on concerns over government efforts to cool the property market, a survey released yesterday showed.
The quarterly real-estate reading gained 1 point to 16, keeping the sector’s business signal unchanged from three months earlier, chiefly because of an increase in trading of underdeveloped plots of land, according to the latest and final report by National Chengchih University after the Ministry of Interior ended its funding last month.
A score of 15 to 17, out of a perfect score of 20, means the housing market is shifting toward a boom. The survey, which was initiated 12 years ago, is considered it no longer necessary now that private-run realtors have launched similar studies.
“It is time for a market correction, as housing prices have expanded beyond reasonable levels,” said Chang Chin-oh (張金鶚), a land economics professor, who presented the findings.
Chang expects home prices to see a modest fall in the second half when the proposed luxury tax takes effect on July 1, subjecting short-term transactions to a heavy levy if properties are not used for self-occupancy.
The tax plan dimmed the business outlook in next six months among construction and financial firms, the survey showed, bucking the leading housing-sector index’s 0.63 percent gain to 96.48 in the quarter ended December.
The gauge is used to predict the market’s performance in the next two quarters after factoring in the nation’s GDP growth, consumer prices, construction stock valuations, home loans and money supply.
Half the construction firms expect the sector to see downward pressure next quarter, while the other 50 percent adopted a neutral view, the survey found.
About 83 percent of financial firms and 64.71 percent of real-estate consultancies echoed the pessimistic sentiment, the survey showed.
Chang suggested prospective home buyers wait a while for significant price corrections. It would be fair for home prices to contract 20 percent in some areas of New Taipei City (新北市) and Taipei City, where housing costs have soared 50 percent in recent years, he said.
Further, there are more than 5,000 real-estate brokerages nationwide, half the number of convenience stores, another sign of overheating, the academic said.
“It makes no sense that home purchases should be as convenient as buying instant noodles,” he said.
Chang and fellow researchers blamed the phenomenon partly on a lack of transparency over real estate transactions that the government has failed to remedy.
A separate study by Chinese-language Housing Monthly (住展雜誌) showed house prices in 12 districts of Greater Taipei remain at record high levels, though transactions plunged 30 percent to 50 percent after the luxury tax plan was revealed on Feb. 24.
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