Taiwanese turned slightly negative about the local property market’s prospects next quarter, as a global economic slowdown and trade tensions dampen sentiment, Evertrust Rehouse Co (永慶房屋) said yesterday.
Nearly 40 percent of respondents to the firm’s survey expect housing prices to fall during the October-to-December period, outnumbering those who expect prices to rise, Evertrust spokesman Jay Hsieh (謝志傑) told a news conference in Taipei.
Another 38 percent held neutral views, down from 43 percent this quarter, ending three consecutive quarters of sentiment improvement, Hsieh said.
“While global trade conflicts are not new, their escalation has affected sales of smartphones and PCs, and raised jitters among prospective home buyers,” he said, adding that Japan and South Korea have resorted to trade restrictions to address diplomatic differences.
Interest rate cuts by central banks around the world affirm an unfavorable turn in the economic landscape going forward, limiting room for expectations of housing price hikes, Hsieh said.
For the first seven months of the year, housing transactions rose 6.7 percent from a year earlier, thanks in part to companies moving back home from China to avoid US tariffs on Chinese goods, he said.
The local property market also benefitted from expectations of capital repatriation after foreign countries adopted strict asset disclosure rules in line with the Common Reporting Standard, Evertrust said.
That is why real estate remained the most popular choice of defensive investment, with support from 35 percent of respondents, up 1 percentage point from three months earlier, Hsieh said.
Against this backdrop, 58 percent said it would be better to enter the property market in the second half of next year after political uncertainty at home and trade disputes abroad settle.
While the presidential election in January next year has slowed purchasing decisions, a bigger factor is the trade dispute, Evertrust general manager Yeh Ling-chi (葉凌棋) said.
Property transactions are forecast to total between 288,000 units and 295,000 units this year, an increase of 3 to 6 percent from last year, Yeh said.
However, that represents a slowdown from growth of 7 percent last year and 14 percent in 2017, he said.
About 70 percent of the transactions were for self-occupancy, while properties for rent made up the remainder, Yeh said.
Retail buyers prefer houses in convenient locations in Taipei and Taichung, while investors favor properties in Taichung and Kaohsiung, where relatively affordable housing makes returns more attractive, the survey said.
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