New home prices saw modest slides in most parts of the nation last quarter, though developers and builders put more projects on the market amid fears that a construction cap to be imposed next year would limit business, a survey by Cathay Real Estate Development Co (國泰建設) showed.
The trend suggests increasing pressures for more evident price corrections going forward, especially in areas with heavy supply, according to the survey jointly conducted with National Chengchi University’s Taiwan Real Estate Research Center.
“It is the first downturn signal after Taiwan emerged from the global financial crisis, and New Taipei City is likely to lead the correction, given its heavy inventory,” Takming University of Science and Technology professor Hua Ching-chun (花敬群) said on behalf of the research panel.
Housing price, trading volume and sale rate indices all pointed downward for two consecutive quarters in New Taipei City, signaling that the market could not hold much longer, Hua said.
The academic attributed the forecast price corrections to recent tax hikes and tightened mortgage terms for second homes in Greater Taipei and parts of Taoyuan County, as the measures make property investment more expensive.
Housing prices averaged NT$383,500 per ping (3.3m2) in New Taipei City during the April-to-June period, while 30-day sale rates and trading volume softened by 5.84 percent and 9.45 percent respectively, the survey found.
Aware of the negative sentiment, builders and developers launched new housing projects valued at NT$110.2 billion (US$3.67 billion), shrinking 7.9 percent from the preceding quarter, the survey indicated.
Nationwide, new construction volume rose 23.5 percent to NT$389.1 billion last quarter, from three months earlier, as companies sought to keep business steady ahead of the Nov. 29 elections and the introduction of a volume limit set for July next year, the survey said.
The latest figures also suggested a slowdown in the migration of property funds to southern Taiwan, the survey said, as housing prices weakened 3.13 percent to NT$149.20 per ping in Greater Tainan and slid 5.61 percent to NT$196.20 per ping in Greater Kaohsiung.
“It is about time the two southern municipalities took a break after seeing a large increase in construction volume over the past two years,” Hua said.
In Taipei, housing prices retreated 5.59 percent last quarter to NT$783,500 per ping with 30-day sale rates plunging 34.9 percent from the preceding quarter, the survey said.
The new home market fared better in Taoyuan and Hsinchu counties, as well as Greater Taichung, though 30-day sale rates declined by double digits, the survey said.
Home prices gained 5.97 percent to NT$222,300 per ping in Taoyuan and Hsinchu, and picked up 3.95 percent to NT$214,200 per ping in Greater Taichung.
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