The prices of prime residential property in Taipei have fallen faster over the past year than in any major global city with the exception of Hong Kong, according to real-estate market consulting agency REPro Knight Frank.
The average luxury home price in 37 cities worldwide covered by the Knight Frank Prime Global Cities Index rose 4.4 percent from June last year to June this year, but fell 7.7 percent in Taipei during the same period, ranking it 36th in the world in the survey.
The rate of decline was only surpassed by Hong Kong, which ranked at the bottom of the index with an 8.4 percent fall in the price of an average luxury home in the city, the consultancy said.
Vancouver topped the rankings with a 36.4 percent increase in luxury home prices in the 12-month period, followed by Shanghai with a 22.5 percent increase and Cape Town with a 16.1 percent increase.
REPro Knight Frank said the index was compiled based on government statistics, including data from the central banks of the nations where the cities are located.
For Taipei, a luxury home was defined as a residence costing at least NT$70 million (US$2.2 million), but it was defined differently in other countries, the consulting firm said.
Andy Huang (黃舒衛), associate director of REPro Knight Frank’s research department, said that the fall in Taipei’s luxury home prices largely resulted from the government’s policy to rein in soaring home prices that were putting homes beyond the reach of average income earners.
Huang said that while Taiwan’s central bank has since eased credit controls on the domestic property market, its grip on the luxury home segment remains in place, which has scared many luxury home investors away and driven prices lower.
With interest in prime residential property fading, only 81 luxury units were bought and sold in Taipei — the most-watched property market in Taiwan — in the first half of this year, down sharply from 209 units in the same period last year, REPro Knight Frank said.
Amid concerns over an economic slowdown and fears of a possible hike in property taxes, luxury home prices in Taipei fell 4.9 percent in the first half of the year, the second-fastest decline of any of the cities surveyed, after Moscow, Huang said.
He said his firm has forecast that luxury home prices in Taipei will fall 6 percent to 10 percent this year.
As for Hong Kong, REPro Knight Frank said weakness in the global economy, a 15 percent stamp tax faced by foreign property investors and an increase in supply contributed to tumbling luxury home prices in the territory during the 12 months ending in June.
Luxury home prices in Hong Kong fell 3 percent year-on-year in the first half of the year, and they could fall 5 percent to 10 percent for this year as a whole, REPro Knight Frank said.
Although Vancouver placed at the top of the rankings, city authorities have announced a tax hike targeting foreign buyers that is expected to dampen market sentiment and send luxury home prices lower down the road, the consulting firm said.
Rounding out the top 10 in the index were Toronto (up by 12.6 percent), Melbourne (up 11 percent), Sydney (up 10.2 percent), Tokyo (up 9.2 percent), Guangzhou, China, (up 8.8 percent), Singapore (up 7.9 percent) and Seoul (up 7 percent).
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