The number of existing home transactions might drop 10 percent next quarter from a year ago with a 5 percent price decline, as the market needs more time to absorb the change in government and safety concerns over soil liquefaction, brokers said citing separate surveys.
The surveys suggested that the market has yet to bottom out after the number of transactions plunged 40 percent in major cities in the first two months of this year from a year earlier.
“Forget about the upcoming spring sales, as buyers would continue to stay on the sidelines unless the government is willing to send easing signals,” Evertrust Rehouse Co (永慶房屋) general manager Yeh Ling-chi (葉凌棋) told a news conference in Taipei yesterday.
Housing deals totaled 18,781 units in the nation’s six major municipalities in the first two months, down 40 percent from the same period last year, with no signs of recovery in sight, Yeh said.
The weak sentiment is bound to deepen after the government on Monday launched an online database showing areas prone to soil liquefaction, which are likely to sustain serious damage in a major earthquake, he said.
A survey by Chinatrust Real Estate Co (中信房屋) confirmed the gloomy sentiment, with 93.4 percent of the respondents expecting housing prices in affected areas to drop and 35 percent of them predicting the fall at more than 20 percent.
Metropolitan areas with high potential for soil liquefaction include Taipei’s Zhongshan (中山) and Datong (大同) districts, New Taipei City’s Sanchong (三重) and Sinjhuang (新莊) districts, Tainan’s coastal areas and Kaohsiung’s Sanmin (三民) and Cianjin (前金) districts, the data showed.
Yeh said he has not yet heard of any transaction disputes linked with soil liquefaction.
Urban renewal projects appear to be the best solution to help ease safety concerns over soil liquefaction, but such projects turn out to be time-consuming and unsuccessful due to the difficulty of winning the approval of all occupants, Yeh said.
Most potential buyers demand greater price concessions than sellers are willing to accommodate, which has further depressed market sentiment, Evertrust spokesman Lin Tai-lung (林泰隆) said.
Corrections of 5 percent to 10 percent in different parts of Taiwan have failed to attract potential buyers who are generally looking at adjustments of up to 15 percent, Lin said.
The widely expected interest rate cuts by the nation’s central bank next week and beyond would not help end the stalemate, he said.
For the domestic real-estate market, healthy economic fundamentals and favorable policy carry more importance, Yeh said, adding that the central bank can help boost confidence by easing down-payment requirements.
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