Taiwanese have turned markedly more pessimistic about the housing market and economic outlook following the closure of the Strait of Hormuz amid escalating Middle East tensions, a survey released yesterday by Evertrust Rehouse Co (永慶房屋) showed.
The poll showed that 42 percent of respondents expect home prices to decline, outnumbering those who expected prices to stay flat at 31 percent and those anticipating gains at 27 percent, Evertrust research manager Daniel Chen (陳賜傑) told a news conference in Taipei.
Sentiment had improved from the fourth quarter last year on the back of exports, but shifted abruptly after the blockade, Chen said.
Photo: CNA
The geopolitical conflict is a “black swan” event for Taiwan’s economy, reversing earlier optimism about the housing market and broader economic outlook, he said.
Escalating military hostilities have disrupted global energy supplies and heightened economic uncertainty, particularly for Taiwan, which relies heavily on imported oil and natural gas, Chen said.
Pessimism about Taiwan’s economic outlook for the second quarter rose, with the proportion expecting the economy to deteriorate increasing to nearly 30 percent, the survey showed.
Surging oil and gas prices have revived worries of inflation, with 38 percent anticipating a rate hike in the first half of the year, up 5 percentage points after the Strait of Hormuz blockade, Chen said.
The survey also asked respondents about the government’s preferential mortgage program, which is to expire on July 31, with policymakers weighing a new version.
About 66 percent supported extending interest-rate subsidies, saying the measure would help improve housing affordability, the survey showed.
Sixty-one percent of respondents favored maintaining the program’s loan ceiling — allowing financing of up to 80 percent of a property’s value with a maximum loan of NT$10 million (US$312,695) — which many view as crucial for young, first-time buyers.
Evertrust general manager Yeh Ling-chi (葉凌棋) said that Taiwan’s housing market remains constrained by the central bank’s selective credit controls and tight mortgage conditions.
Most mortgage rates for first-home buyers have climbed above 2.5 percent, increasing affordability pressure and lengthening the time buyers take to make purchase decisions, Yeh said.
Despite sluggish demand, pre-sale home prices continued to rise last year, gaining 12 percent in Taipei and New Taipei City, 16 percent in Taoyuan, and 25 percent in Tainan and Kaohsiung, he said, citing Evertrust data.
Developers might need to make price concessions to facilitate transactions, he said.
“The monetary easing that developers had advocated is no longer feasible amid rising inflation pressures,” he added.
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