Presale and new housing transactions last quarter totaled NT$382.7 billion (US$12.96 billion), rising by double-digit percentages from the previous quarter and a year earlier, as the market emerged from the COVID-19 pandemic unscathed, thanks to real demand and ample liquidity, a survey released by Cathay Real Estate Development Co (國泰建設) showed.
The transaction volume surged 42.9 percent from three months earlier and increased 14.7 percent from the same period last year, it said.
“The market appeared unaffected by the virus outbreak in light of the second-quarter results, but people had better be cautious and watch out for the pandemic’s fallout in the long run,” the quarterly report said on Thursday last week.
Housing prices soared 24.14 percent in Taichung to NT$274,700 per ping (3.3m2) in Taichung and jumped 12.34 percent to NT$266,800 in Taoyuan, the report showed.
Prices gained 7.59 percent to NT$264,700 per ping in Hsinchu and grew 5.91 percent to NT$228,800 per ping in Tainan. Taipei reported a 2.42 percent pickup in housing prices to NT$823,700 per ping and Kaohsiung witnessed a 1.53 percent increase to NT$237,100 per ping, the report said.
Housing prices in New Taipei City bucked the trend with a 1.93 percent decline to NT$403,100 per ping, it said.
Jinwen University of Science and Technology finance professor Chang Ting-hsuan (章定煊) said he was surprised at the rapid increase in housing prices, which reflected confidence on the part of developers and acceptance on the part of buyers.
Usually, it takes several years to see prices advance by double-digit percentages, Chang said.
Although real demand lent support, a sizable number of investors likely rejoined the market because of ultra-low interest rates in most other investment tools around the world, he said.
The central bank in March cut its policy rates to a record low of 1.125 percent, while peers in the US, Europe and Japan kept them near zero or in negative territory to help shore up the economy and avoid a liquidity crunch.
Sales rates for 30-day averages inched up 1.26 percentage points to 11.04 percent, while room for price negotiation narrowed by 0.1 percentage points to 13.29 percent, the report found.
Developers actively launched new projects and grew increasingly inflexible regarding price concessions, Chang said.
The supply side cannot single-handedly push up housing prices, Chang said, adding that buyers must have accommodated the pricing strategy.
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