Commercial, residential transactions down in five of six cities in June
July 6, 2014, 12:09 am TWN
TAIPEI--Transactions of residential and commercial property fell in five of Taiwan's six major cities in June, with market analysts Saturday attributing the downturn to fears of further action by the government to tighten control on the property market.
Analysts urged the government not to hurt consumer confidence and to refrain from imposing too much of an adversary impact on the local property market in its quest to cap high-flying home prices.
In June, three cities in northern Taiwan — Taipei, New Taipei and Taoyuan County (which will upgrade to a municipality at the end of the year) — suffered the steepest declines in housing transactions as they felt the pinch from weakening confidence amid a move by the central bank to rein in housing loans, government statistics showed.
Transactions in Taipei for June fell 22.9 percent from a month earlier to 2,482 units, while sales in New Taipei dropped 11.1 percent to 5,336 units, and transactions in Taoyuan shed 13.1 percent to 3,785 units, the statistics indicated.
In southern Taiwan, housing transactions in Tainan fell 10.6 percent month-no-month in June to 1,712 units and sales in neighboring Kaohsiung dropped 6.1 percent to 3,478 units.
Taichung in central Taiwan was the only major city to buck the downtrend, seeing transactions rise by 8.5 percent in June from a month earlier, for a total of 4,301 units.
Analysts said the property markets in northern Taiwan, particularly in Taipei and New Taipei, have been watched closely as they serve as an important indication to the outlook for the country as a whole due to their high price tags.
Huang Shu-wei, a manager with the market research and development center at Yung Ching Realty Group, is among the analysts worried about the local property outlook as the government continues to push for more tightening measures.
Many property buyers have turned more cautious than ever after the Legislative Yuan approved a bill in late May to raise the housing tax on homes not occupied by their owners to dissuade speculators from hoarding, Huang said.
Huang said banks across Taiwan, monitored closely by the central bank, have raised home mortgage rates and lowered their loan ceilings for deals of non-owner-occupied homes, further striking a nerve with property investors.
In late June, the central bank announced new measures to cap the loan-to-value (LTV) ratio — the percentage of a home's value that a bank is allowed to loan to a buyer.
Huang said he expects buying interest in the local property market will remain low in the near term amid concerns over the government's tighter control.
The analyst called on the government to maintain a healthy property market and not allow transactions to fall too sharply, even as authorities work to prevent the property market from forming a bubble.