About 41 percent of Taiwanese expect housing prices to decline next quarter, easing for the eighth consecutive quarter from 44 percent three months earlier, as the local property market continues to consolidate backed by real demand, Evertrust Rehouse Co (永慶房屋) said yesterday.
The mild, but gradual improvement in sentiment might lead sellers to stand firm by their prices and slow transactions going forward, as buyers have shown no interest in higher prices, a quarterly survey by the nation’s largest real-estate broker showed.
“Housing deals increased this quarter, while prices flattened in most parts, with small gains in others, amid a stable economy,” Evertrust general manager Yeh Ling-chi (葉凌棋) told a news conference.
It is too early to conclude that housing prices have emerged from a downturn due to lingering expectations of prices falling, he said.
Prospective buyers would stay on the sidelines unless sellers agree to cut prices by 15 percent from the peak in 2014, he added.
A brewing trade war between the US and China has deepened caution and could translate into concrete damage if the world’s two largest economies make good on threats of heavy tariffs, which would hurt global trade, Yeh said.
The world might get a better idea of what the situation looks like next quarter or toward the end of this year, he said, as US tariff hikes on Chinese goods are to take effect on July 6 and China has promised retaliatory measures, which are to take effect on the following day.
Evertrust forecast that housing transactions would reach 135,000 to 140,000 units in the first half of this year, or an increase of 5 percent to 8 percent from the same period last year, while the volume for the entire year might climb 9 percent to 290,000 units.
Although housing prices have over the past few years fallen 13 percent in Taipei and 11.6 percent in New Taipei City, luxury homes might find support from a rally on the local stock market, Yeh said.
Corporate owners might shift partial capital gains to luxury homes to help diversify risks, as the TAIEX will probably not remain above 10,000 points forever, he said.
The central bank, which yesterday kept interest rates unchanged for the eighth consecutive quarter, might consider tightening its stance next year to tame inflationary pressures, Yeh said.
Interest rate hikes might help ease imported inflation caused by an ongoing rise in oil prices and appreciation of the US dollar, he said.
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