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Housing market enters consolidation mode as global economy slows down: statistics

TAIPEI -- The local housing market has entered a consolidation mode with the economic fundamentals at home and abroad slowing, an analyst said yesterday, citing June property transaction statistics.

Tseng Ching-te, a research manager with Sinyi Realty Inc., one of Taiwan's leading property agencies, said buying in the home market has been compromised by the economic weakness, reflecting a more than 10-percent month-on-month decline in transactions recorded last month.

The drop in June broke a recovering streak in the past few months since the Lunar New Year holiday, which started from late January, as buying was dragged down by escalating concerns over the economy, Tseng said.

Earlier this week, the government cut its forecast of Taiwan's gross domestic product (GDP) growth in 2012 to 2.08 percent, from a previous estimate of 3.03 percent, amid a weakening global economy.

Soon after the government's downgrade, UK-based bank Barclays even lowered its full-year GDP growth forecast for Taiwan to 1.7 percent from an early estimate of 3 percent.

In June, transactions of residential and commercial properties in Taiwan fell 10.52 percent from May to 31,286 units, according to the statistics released by the Ministry of the Interior.

The statistics showed around the island only Kaohsiung City recorded an increase (4.13 percent) in housing transactions last month, while Taipei City, New Taipei City and Taichung City all posted declines of 6.07 percent, 6.69 percent, and 6.11 percent, respectively.

Declines in Taoyuan County and Hsinchu County even hit 16.99 percent and 36.96 percent, respectively.

In the first half of this year, transactions of residential and commercial properties fell 20.88 percent from a year earlier to 158,673 units due to the impact of the luxury tax, which took effect in June 2011 to curb skyrocketing local home prices.

Tseng said the local property market is expected to remain haunted by economic uncertainty, expecting the market to report that housing transactions for July would stay little changed from June.

He said as the third quarter is a slow season of the year for the local property market, slowing buying interest is expected to continue until the end of September, when property developers are scheduled to launch new residential projects to boost sales.

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