The central bank’s interest rate hike and Russia’s invasion of Ukraine have weakened expectations of rising housing prices among Taiwanese, with a majority thinking that the next six months would be the best time to sell a house, a survey released yesterday by Evertrust Rehouse Co (永慶房屋) found.
As global central banks tighten their monetary policies and Russia’s invasion of Ukraine nears one month, only 62 percent of respondents said they expected housing prices to continue to rise, down from 71 percent three months earlier, Evertrust research manager Daniel Chen (陳賜傑) said.
The decline of sentiment came after the US and Taiwan last week raised interest rates by 25 basis points, and inflationary pressure looms large due to soaring international crude oil, base metal and grain prices, Chen said.
Photo: Hsu Yi-ping, Taipei Times
Taiwan’s rate hike came three months earlier than expected, fueling concern that the central bank might further increase rates to curb inflation.
Central bank Governor Yang Chin-long (楊金龍) said last week that controlling inflation sits at the top of his agenda, while US Federal Reserve Chairman Jerome Powell on Tuesday said that he would consider more aggressive action in May if inflation continues to run hot.
Eighty-one percent of respondents said they could tolerate interest rate hikes of 0.75 percent, but that steeper adjustments would pose an unbearable burden, Chen said, adding that 40 percent said tighter monetary policies would not affect their home purchase plans, while 37 percent said they would postpone buying.
Fifty-four percent of respondents estimated that the second half of the year would be the best time to sell a house, Chen said, attributing the result to a draft bill that would ban transfers of presale project contracts, the government’s latest effort to combat short-term property speculation.
Transactions of presale project contracts amounted to NT$1.28 trillion (US$44.83 billion) last year, a 34.9 percent increase from a year earlier, mostly concentrated in Taoyuan, Hsinchu and Taichung, Evertrust general manager Yeh Ling-chi (葉凌棋) said.
The survey was the broker’s first on presale projects since the authorities subjected them to real-price transaction disclosures.
Speculation on presale projects is blamed for driving up prices in the past few years, in part because presale projects require less capital.
Presale housing projects last year cost more than NT$10 million per unit in Taoyuan, Hsinchu, Taichung, Tainan and Kaohsiung, rising by 27.9 percent to 43.6 percent from 2019, Yeh said.
“Prior to that, only houses in Taipei and New Taipei City met the threshold,” Yeh said, as the affordability of housing has become an issue in all of the special municipalities.
Evertrust Rehouse expects housing transactions to hold steady in the first half of the year at about 179,000 units, as the nation’s robust economy is likely to lend resilient support, Yeh said.
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