Taiwanese have turned conservative about the domestic property market amid the US-China trade war and a potential supply glut, Evertrust Rehouse Co (永慶房屋) said yesterday, citing a quarterly survey.
Forty-eight percent of respondents expect housing prices to fall next quarter, ending eight quarters of improvement, the company said.
The sentiment downturn comes as the US and China impose fresh tariffs on mutual imports, worsening the uncertainty over the global economic scene, Evertrust general manager Yeh Ling-chi (葉凌棋) said.
Taiwan’s export growth has slowed and might slip into negative territory in the coming months, despite a high sales season for consumer electronics, Yeh said.
Building permits nationwide rose to a decade-high in the first seven months of this year, suggesting a spike in pre-sale projects between 2020 and 2021, while the market might fail to digest unsold houses, he said.
Confidence had steadily picked up in previous quarters, leading many to believe that a recovery is around the corner if not already under way, Yeh said.
The sentiment is weakest in Taipei and New Taipei City, where a majority of respondents have negative views about housing prices, the survey found.
There were 74,529 unsold units last year and the number might increase considerably this year, as construction of pre-sale projects finishes and more projects join the market, Yeh said.
Housing transactions grew 5.7 percent in major cities as of last month, but the pace tapered off in the second half, Yeh said.
The gain is likely to ease to 3 percent next quarter, due to a high base of comparison last year and increasing market turbidity, he said, adding that volatility in stock markets around the world might push buyers to the sidelines.
Meanwhile, people with mortgage burdens might face cash strains as grace periods for some mortgages mature later this year and beyond, Yeh said.
State-run banks have expressed a willingness to extend grace periods by another one to two years as NT$542.9 billion (US$17.63 billion) of mortgages demand principal payments this year alone, Yeh said.
Mortgage loans totaled NT$1.05 trillion as of late March.
The burden is particularly acute for investors, who had intended to cash out before honoring principal payments, but are now stuck due to price declines, he said.
Housing prices have declined 10 to 13 percent nationwide from their peaks in 2014, with the corrections more evident in Taipei, Kaohsiung and New Taipei City, the survey showed.
Prospective buyers generally demand an extra concession of 10 to 20 percent to motivate them, Evertrust researcher Jay Hsieh (謝志傑) said.
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