Taipei luxury home price has year's 1st drop
By Kathryn Chiu, The China Post
March 28, 2014, 12:08 am TWN
TAIPEI, Taiwan -- After the unit price per ping of a luxury home project in Dazhi dropped over 8 percent recently, analysts believe that Taiwan's high housing prices have finally started giving way this year.
Taiwan-based My Housing Magazine on Thursday published a market research report saying that despite record-high prices of newly launched projects in Taipei, the market has recently shown signs of sluggish sales.
According to My Housing, a two-year-old luxury housing on Ming-shui Rd. in Zhongshan District was recently renamed after being handed over to a real estate agent. The unit price per ping, which amounts to 3.306 square meters, of the luxury housing project was slashed 8.8 percent to NT$1.55 million, also a cumulative decrease of 20 percent over the last two years.
A sales office manager with the project confirmed the report to the United Evening News, saying without reservation that the price adjustment was meant to boost sales of the project.
My Housing's research indicated that the project is far from an exception. The list price of some projects in the Xin-Zhuang area recently declined due to public facilities work that has fallen behind schedule.
Some construction companies are mulling adjustments to their pricing strategy for the local market in a bid to cash in on current projects and re-invest in overseas property markets.
Housing Prices Could Drop by over 10%: Expert
Despite the central bank's decision to maintain current interest rate levels, Taiwan's high housing prices could finally give way this year, allowing more room for non-luxury home seekers to haggle, according to real estate experts.
It is widely expected that interest rates will likely rise significantly in the second half of this year and the first half of next year now that the U.S. Federal Reserve has openly said that it is ready to scrap bond-buying programs in the Fall and raise the interest rate in 2015.
Interest rate hikes are bound to put downward pressure on housing prices, Hua Ching-chun, an associate professor of real estate management and investment at Takming University of Science and Technology, told a local media outlet.
He said that housing prices could drop by more than 10 percent this year and continue their downward trend for the next 3-5 years.
The expected drop combined with already high prices countrywide mean that now is not a good time to buy homes, he advised.
Weakening transaction volume and high prices in Taipei have caused housing market speculation to shift toward Central and Southern Taiwan, he noted. As a result, those areas will see downward pressure several months later than the Greater Taipei region.
Chuang Meng-han, a professor of industrial economics at Tamkang University, said that the property market this year is seeing shrinking transactions, fewer houses sold at their ballooned prices, more opportunities for buyers to haggle and mounting downward pressure.
He said that the prices for ordinary homes, particularly in areas with excess supplies of housing, will drop gradually.