Taiwan’s housing market cooled sharply this year, with property transfers in the first nine months plunging 28.1 percent to 194,976 units — the lowest level for the period since 2017, data released yesterday by the Ministry of the Interior showed.
The volume ranks as the third-lowest on record, with only 175,787 units in 2016 and 193,238 units in 2001 lower, according to Chen Chin-ping (陳金萍), deputy research head at Evertrust Rehouse Co (永慶房屋), Taiwan’s largest broker by number of offices.
Chen attributed the slowdown to the central bank’s ongoing selective credit controls, tighter loan restrictions and limited supply of new-home handovers.
Photo: Hsu Yi-ping, Taipei Times
Seasonal factors, such as the traditionally slow summer vacation period, further dampened market activity, she said.
The decline contrasts sharply with last year’s monthly transactions, which exceeded 30,000 units from April to August, fueled by favorable lending terms for first-time buyers.
The surge prompted the central bank to tighten mortgage conditions to curb risks of loan concentration and a potential housing bubble.
Policymakers sought to ease the slowdown last month by freeing first-home loans from the banking loan ratio limit, enabling banks to extend more credit. Authorities also extended the window for home relocators to sell properties from 12 months to 18 months after purchase, while retaining first-home mortgage privileges.
“The policy adjustments are positive for loan accessibility and may help reduce the wait-and-see attitude among first-time buyers,” Chen said.
Despite the measures, last month’s home sales fell 3.9 percent from the previous month and dropped 30 percent year-on-year, highlighting ongoing caution among buyers amid economic uncertainty, including potential impacts from US tariffs.
The government has described the 20 percent tariffs as temporary and said trade negotiations continue, hoping to bring down the tariff rate.
Market watchers said the fourth quarter would be crucial in assessing whether policy easing could stabilize transactions. The central bank plans to review loan restrictions in December to determine whether they should be extended into next year.
In related developments, Taiwan’s construction cost index rose just 0.8 percent in the first three quarters, the slowest pace since 2017, according to Sinyi Realty Co (信義房屋).
The slowdown signals that cost-driven pressures on housing have largely disappeared, even though developers have said there is little room for price concessions given earlier spikes in building material costs since the COVID-19 pandemic.
“With construction costs stabilizing, housing prices will increasingly depend on demand rather than cost pressures,” Sinyi Realty research manager Tseng Ching-der (曾敬德) said.
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