Realtors unfazed by interest rate speculation
The China Post news staffTAIPEI, Taiwan -- The ongoing high sales season for the local housing market, running from Sept. 15 through Oct. 30, won't be significantly affected by the recent remark made by central bank Governor Perng Fai-nan that interest rates won't linger at low levels, according to market sources.
September 29, 2013, 12:03 am TWN
Perng's remark hinted that the Central Bank of the Republic of China (Taiwan) may hike its key interest rates in the near future, sending shock waves through the local housing market. But market insiders said that the central bank won't recklessly hike interest rates before conditions mature, and therefore housing sales in the current high season will remain brisk.
Insiders continued that some unfavorable factors that may affect housing sales during the season have been removed. For instance, the Ministry of Finance hasn't yet sent to the Legislative Yuan its amendments on the luxury tax imposed on housing trade, indicating that the amendments are not likely to be screened at the current legislative session. In addition, the U.S. Federal Reserve has recently announced that the third quantitative easing (QE3) policy will remain in place for now.
Accordingly, there is no reason for the local housing market to turn lukewarm in the sales season of Sept. 15-Oct. 30, a regular high season in the second half of the year, insiders said.
Statistics compiled by My Housing magazine showed that local construction firms have launched NT$179.4 billion worth of housing projects for sales in the current high season, down 18 percent, or NT$39.5 billion, from the corresponding figure of a year earlier, yet remaining the second highest level of its kind in five years.
Tseng Chun-sheng, general manager of the Hi-Yes Group, a major realty agent in Taiwan, said that house buying sentiment seen in the current sales season is much stronger than seen in the June-August period.
Tseng said that the revisions to the luxury tax bill won't be finalized by the end of the first quarter of next year, therefore the local housing market won't become lackluster in the current high season or the last two months of the year.
Lin Chao-chang, a vice president in the realty sales agent department of Sinyi Realty Group, seconded Tseng's view. He said that the QE3 policy of the U.S. won't be tapered in the foreseeable future and the luxury tax bill amendment can only be enacted in the short term with difficulty, therefore no significant unfavorable factor will adversely affect the housing market by the end of the year.
Lin went on to say that the central bank won't hastily hike its key interest rates, adding that if the U.S. Fed decides to boost interest rates, the central bank will usually follow suit one quarter or two quarters later and the size of the hike is generally not too large.
Meanwhile, Chao Teng-hsiung, chairman of the Farglory Construction Group, said that what counts most for his group is to offer excellent architecture design plans, competitive prices and added-value for every Farglory housing project.
Lai Cheng-yi, chairmen of the Shining Construction Group, noted that to meet growing market demand for self-residence houses sized under 30 ping (1 ping is equal to 3.3 square meters), his company has launched four housing projects in Taipei, New Taipei and Taichung, valued at NT$20 billion for the ongoing high housing sales season. He added that sales have stayed brisk after the projects were launched.
In addition, Ni Zi-jen, director of the research and development division of My Housing magazine, also noted that houses with unit prices of under NT$10 million are most popular with first-time house buyers aged between 30 and 35.
Ni said that average local housing prices have lingered at high levels, and are not likely to fall sharply even after the central bank hikes key interest rates. He forecasts housing prices to decline by 3-5 percent early next year.