Transactions of residential and commercial property in Taiwan’s six largest cities tumbled about 24 percent from a year earlier in the first quarter of this year, with analysts citing a rate hike cycle launched by the central bank and the government’s measures to cool market speculation as the main reasons.
According to statistics released by the six local governments, transactions of homes, offices and shops in Taipei, New Taipei, and Taoyuan cities in the north, Taichung in central Taiwan, and Tainan and Kaohsiung in the south, totaled 49,290 units, down 24.1 percent from a year earlier.
Lang Mei-nan (???), a research manager at Great Home Realty, said the local property market lacked incentives to stimulate sales, while a rate hike cycle by the central bank seriously impacted the property market.
Since March 2022, the central bank has raised its key interest rates by 75 basis points after the fifth consecutive increase last month to take on rising inflation, with the discount rate hitting 1.875 percent, the highest level in eight years.
To Lang’s estimate, home buyers with a 30-year loan of NT$10 million (US$328,515) are expected to pay an additional NT$40,000 per year in interest after the five rate hikes.
Lang said the government’s new measures to rein in skyrocketing home prices also led property investors to scale back their buying. In January, the government passed amendments to the Equalization of Land Rights Act, which aimed to tamp down speculation in the home market through conditional prohibition of transfers or reselling of purchase orders for pre-sold homes and newly constructed homes.
During the January-March period, housing transactions in Taipei, the most closely watched property market in Taiwan, fell 27.5 percent from a year earlier to 5,677 units; sales in New Taipei, the most populous city in the country, dropped 24.5 percent from a year earlier to 12,521 units; and transactions in Taoyuan also dropped 27.8 percent to 8,190 units, the data indicated.
In Taichung, transactions of residential and commercial property fell 21.9 percent from a year earlier to 9,945 units in the three-month period, while sales in Tainan and Kaohsiung fell 19 percent and 22.3 percent, respectively, to 4,932 and 8,025 units, the data showed.
According to Taiwan Realty Enterprise, the first quarter sales in Tainan dipped to a new low in six years, while the first quarter transactions in Kaohsiung dropped to the lowest level in three years.
In March alone, sales of homes, offices and shops in the six cities fell 17.4 percent from a year ago to 20,860 units but rose 31.9 percent from a month earlier.
Chen Ting-chung (???), a senior manager of Taiwan Realty Enterprise, said the month-on-month sales rebound in the six cities partly reflected the increase of working days in March, while the growth also resulted from a relatively low comparison base over the previous year.
In March, housing transactions in Taipei rose 20.9 percent from a month earlier to 2,255 units, sales in New Taipei grew 26.3 percent to 5,539 units, transactions in Taoyuan rose 50.9 percent to 3,395 units, and sales in Taichung also rose 25.2 percent to 4,047 units, the data showed.
Transactions in Tainan and Kaohsiung rose 48.2 percent and 31.9 percent, respectively, from a month earlier to 2,181 and 3,443 units in March, the data indicated.
Tseng Ching-der (???), a research manager with Sinyi Realty Inc., said that as the local property market was in the doldrums in the second half of last year, transactions in the second quarter of this year could return to a growth pattern due to a low comparison base.
Source: Focus Taiwan