The new home market indicator flashed its first “blue” light last month, ending nine months of “yellow-blue” signals, as the recent nine-in-one elections drove the market into recession, the Chinese-language Housing Monthly (住展雜誌) magazine said in a report last week.
The business climate gauge slipped to 29.12 points last month, down from 33.2 points in October, as developers shunned launching new projects or placing advertisements for fear that they would fail to catch the public’s attention in the run-up to the elections on Nov. 29, the publication’s research manager Ho Shih-chang (何世昌) said.
“The concerns proved to be well-advised given the latest data,” the report said.
A score below 32 suggests contraction, while scores of 62 and higher indicate a boom and that a slowdown is merited, the report added.
It is the second time the light has flashed “blue” this year.
The previous time was in January when the Lunar New Year holidays dampened buying interest and transactions, the report said.
The score last month was lower than the 31.6 recorded in January, with pre-sale projects shrinking to less than NT$20 billion (US$642.9 million), the report said.
Building companies continued to roll out projects regardless of the elections in an attempt to minimize the disruption caused by political uncertainty, Ho said.
There was only one project, in Taipei’s Nankang District (南港), with a construction volume of more than NT$2 billion, the report said.
New Taipei City fared little better with two projects hitting the NT$2 billion mark, in stark contrast to the past few years when construction companies have launched new projects to attract buyers who cannot afford houses prices in Taipei, Ho said.
For two consecutive months, not a single new project in Greater Taipei features apartments with floor space larger than 70 ping (231m2), indicating that small and relatively affordable apartments continue to be the trend, the report said.
A new project by Cathay Real Estate Development Co (國泰建設) in Tucheng District (土城) proved to be the exception as it features medium-sized apartments with relatively high asking prices of NT$660,000 per ping, the report said.
“The project is rather popular owing partly to the company’s brand value,” Ho said.
The business gauge could bounce back this month as builders and developers might put new projects on the market now that the elections are over and buyers might be more likely to return to the property market, the report said.
New construction volume could reach NT$100 billion and advertisements might grow by 50 percent this month from last month due to less uncertainty, Ho said.
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