The real-estate market is likely to stay in the doldrums this year as expectations of price drops linger, but sellers are not likely to yield much, Cushman & Wakefield Taiwan said yesterday.
“Another 10 percent price correction is necessary to motivate buyers, but it would take major external shocks for sellers to make a concession of such magnitude,” Cushman & Wakefield Taiwan general manager Billy Yen (顏炳立) told a news conference in Taipei.
Otherwise, a stable economy and low borrowing costs would continue to lend support to the property market, extending the tug-of-war over prices for another two years, Yen said.
Recent talk of market recovery by some developers and real-estate brokers has been aimed at drumming up confidence in the market, but it is likely to be futile as previous efforts in the past few years have been, he said.
Commercial property transactions last year declined to a record low of NT$47 billion (US$1.59 billion), down 33.14 percent from 2016, Colliers International Taiwan (高力國際) said last week.
Land deals amounted to NT$123.8 billion last year, better than a 10-year average of NT$119.7 billion as some developers showed renewed interest in building inventory, Cushman & Wakefield property appraisal director Charlie Yang (楊長達) said.
The improvement in land deals had more to do with a desire by owners to cash out and many managed to do so after showing considerable pricing flexibility, he said.
Price cuts remain the key to boosting transactions for residential and commercial properties, he said.
The housing market saw a hefty pickup in transactions in the first half of last year, but the pace tapered off in the second half, indicating that it is too early to speculate about a recovery, Yen said.
Real demand, or self-occupancy needs, is expected to continue to underpin the market this year as investors stay on the sidelines, although the market cannot regain its vigor without the participation of investors, he said.
Yen expected existing home transactions nationwide last year to fall to about 270,000 units, below the healthy mark of 300,000 units.
Government data will not available until the end of this month.
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