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August 21, 2017

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Housing transactions rise more than 10% in July

TAIPEI--Property transactions in Taiwan reached over 34,000 in July, up by more than 10 percent from the previous month, according to statistics released by the Ministry of the Interior Saturday.

Transactions of residential and commercial properties on the island last month increased 3,164 units, or 10.11 percent, from a month ago, marking the second highest monthly figure since the luxury tax took effect in June 2011, the statistics showed.

The tax has greatly influenced the housing market in Taiwan. During the January-March period, property transactions nationwide dropped to between 18,102 units and 27,592 units a month.

The luxury tax was put in place to curb speculation, which had sent housing prices in northern Taiwan soaring between 2009 to 2011 and made housing for average income earners unaffordable.

It imposes a 15 percent sales tax on second homes sold within one year of purchase and a 10 percent sales tax on properties sold between one and two years after they were purchased.

Among the five municipalities, only Kaohsiung's July property transactions posted negative monthly growth of 7.3 percent, while those in Taipei, New Taipei, Taichung and Tainan gained strength.

Tainan saw the biggest increase from 1,730 units sold in June to 2,372 units in July, registering a 37.11 percent growth.

Local property brokers attributed the growth to a policy that requires the actual price of real estate transactions to be made public starting from Aug. 1.

Previously, property owners did not have to pay property taxes on the actual price of the property, but on a much lower amount.

However, they also warned that it is still hard to say the housing market has started to pick up, predicting a steadier growth in the last quarter of the year.

Citing a survey by H&B Realty, the company's head researcher Jessica Hsu said the country's property transactions in August will see a drop of some 5 percent, due to recent typhoons and the impact of Ghost Month.

Local consumers tend not to buy big items like cars or homes during Ghost Month, which runs Aug. 17-Sept. 15 this year based on the Chinese lunar calendar, to avoid bad luck, preferring to make purchases before or after that period.

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