Taiwan’s property market is cooling fast, with sellers across seven major cities conceding the steepest discounts since the COVID-19 pandemic, as tighter mortgage terms and faltering demand sap confidence, Evertrust Rehouse Group (永慶房產集團) said yesterday.
The average gap between asking and closing prices widened to 10 to 12 percent last quarter, from single-digit percentages at the peak of last year, as price concessions helped expedite deals, the real-estate brokerage said.
Taipei led at 12.8 percent, followed by New Taipei City at 11.5 percent, Tainan at 11.1 percent and Kaohsiung at 10.7 percent, it said.
Photo courtesy of Evertrust Rehouse Group
Taoyuan, Hsinchu and Taichung neared double-digit percentage levels that would have been unthinkable a year ago, it said.
“High net worth buyers remain selective and sellers have little choice but to budge,” Evertrust deputy research head Chen Chin-ping (陳金萍) said. “Financing is no longer friction-free and sentiment has turned conservative.”
Pricing differences in the seven cities fell below 10 percent — with some districts as low as 7.2 percent — at the market’s high point in the second quarter of last year, Chen said.
The mood shifted in September last year when the central bank implemented loan-to-value limits on second homes and restricted lending terms for developers, she said.
Transactions have since wilted, with only 63,000 transfers registered nationwide in the first three months of this year, a 20 percent drop from a year earlier and the weakest showing in eight years, Evertrust said.
The unpredictable shifts in US trade policy and the local currency’s fast appreciation cast further shadows over the economic outlook globally and domestically, it said.
Cutting prices to secure deals is the key to breaking the current stalemate in the housing market, Chen said.
“Homeowners who want to exit quickly should follow market trends and adjust their listing prices in a timely fashion,” she said. “Otherwise, transactions will struggle to rebound and the market’s sluggishness will persist.”
Buyers, for their part, need to monitor price movements closely and choose their entry point in a reasonable manner, she said.
In related developments, Taiwan’s household size is shrinking, as demographics turn from tailwind to headwind, Sinyi Realty Inc (信義房屋) said, citing Ministry of the Interior data.
Homes occupied by one or two people rose past 3.8 million last year, constituting 49 percent of the national total, Sinyi said.
Singles already dominate Taipei, New Taipei City and Kaohsiung, Sinyi research manager Tseng Ching-der (曾進德) said, adding that small families account for more than 46 percent in Taoyuan, Taichung and Tainan.
The change in house tax rates likely lends support to the “one owner, one home” trend and so does the ever rising divorce rate, Tseng said.
The house tax rate has been reduced from 1.2 percent to 1 percent for individual taxpayers who only own one home, encouraging a small household, he said.
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