Housing transactions in the nation’s six special municipalities last month totaled 24,018 units, about the same as a year earlier, but down 13 percent from a month earlier, as COVID-19 measures and the Lunar New Year holiday dampened buying interest.
Potential buyers became more conservative as global monetary authorities signaled plans to raise interest rates later this year, which would add to property owners’ financial burden, Evertrust Rehouse Co (永慶房屋) deputy head Chen Chin-ping (陳金萍) said.
The US Federal Reserve has made known its intent to raise interest rates starting next month, and Taiwan’s central bank would soon follow suit, Chen said.
Photo: CNA
The central bank in December introduced more credit controls on real-estate financing, and some board members pushed for rate hike discussions at the next policy meeting to help cool inflationary pressures and the property market.
The Ministry of the Interior has banned transfers of presale housing contracts and is providing financial rewards for tips that help crack down on property speculation, Chen said.
The series of unfavorable measures has sidelined prospective buyers, even though Taiwan’s economic fundamentals are better than expected, she said.
That explained why property transactions in Taipei last month shrank 5.2 percent from December to 2,720, while deals in New Taipei City dropped 10.6 percent to 6,202, Evertrust said, citing data from the respective local governments.
Compared with the previous month, housing sales in Taoyuan tumbled 13.6 percent to 4,346 and slumped 18.1 percent to 4,671 in Taichung, official data showed.
Transactions in Tainan decreased 6.1 percent to 2,235 and fell 19.9 percent to 3,844 in Kaohsiung.
Last month’s poor showings also had to do with the holiday season, as people were preoccupied with family reunions and celebrations, Sinyi Realty Inc (信義房屋) research manager Tseng Ching-der (曾進德) said.
Therefore, developers wrapped up construction and ownership transfers well before the holiday, elevating the comparison bar for December, Tseng said.
Housing prices last year increased to record highs in several areas outside Greater Taipei, and the trend would inevitably draw attention from policymakers, Tseng said.
The government is likely to tighten restrictions further later this year, he added.
Unaffordable housing prices would evolve into a social problem and policymakers would take steps to address the issue, he said.
Evertrust’s Chen agreed, suggesting that potential homebuyers be cautious and avoid overleveraging before joining the property market.
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