Taiwan’s property market is poised for a rebound next year after hitting a cyclical low this year, with presale transactions plunging about 70 percent under stringent credit controls, the Real Estate Alliance of the ROC (Republic of China), Taiwan (中華民國不動產聯盟總會) said at its year-end news conference yesterday.
The Taipei-based trade group’s chairman Emerson Lin (林正雄), also head of Taichung-based developer Full Wang International Development Co (富旺國際開發), said buyer traffic has begun to return in the past few months, laying the groundwork for recovery.
The market cooled sharply after the central bank rolled out sweeping mortgage restrictions in September last year, triggering a 30 percent contraction in new-home transactions and a 70 percent slump in presale sales.
Photo: CNA
As of September, presale volumes totaled just 28,100 units, a 73 percent annual decline.
Nationwide property transfers of existing homes and presale projects are expected to fall to 256,000 units this year, marking a 27 percent drop and the second-weakest level in 35 years, Lin said.
Despite the downturn, underlying demand remains solid, he said, pointing to the creation of more than 135,000 new households annually and expectations that Taiwan’s economy would record its fastest GDP growth in 15 years this year.
“Unfortunately, the construction sector — a key domestic engine — has stalled,” Lin said, adding that a recovery in domestic demand would help rebalance economic growth.
To support the market, the alliance urged the government to expand first-home subsidies, ease loan restrictions on second homes and accelerate regulatory reforms related to building-space calculations, he said.
Taiwan’s high public-area ratios inflate effective prices and worsen affordability for young buyers, he said.
Lin said he saw five major trends reshaping the market: mounting economic pressures, shifting family structures, evolving social patterns, the rise of the rental sector and a wave of downsizing among seniors.
These forces are likely to steer next year’s housing market toward smaller and more refined units, with hotel-style serviced apartments that offer comprehensive property management services emerging as standout favorites, he said.
With preferential mortgage terms for first-homes set to expire in July next year, policymakers should relax credit controls, Lin said, adding that prolonged tightening could widen loan-to-value disparities, disadvantage first and second-home buyers, and increase default risks.
He also urged more flexible lending for growing families, saying such measures could help support Taiwan’s low birthrate and encourage owners to release vacant homes into the rental market, increasing supply for households priced out of ownership.
Lin said he expects “real-demand” buyers to re-enter the market next year, adding that governments often ease credit conditions ahead of major elections, referring to next year’s local elections.
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