Housing market shows signs of stabilizing: poll

• By Crystal Hsu / Staff reporter

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Taiwan’s housing market has shown signs of stabilizing as consumers become less bearish on property prices, but tight mortgage lending is likely to keep any recovery in transactions modest, a survey released by Evertrust Rehouse Co (永慶房屋) on Wednesday showed.

The share of consumers expecting home prices to fall next quarter dropped to 28 percent this quarter from 36 percent in the previous quarter, while those expecting prices to remain unchanged rose to 43 percent from 37 percent and those anticipating prices to rise edged up 2 percentage points to 29 percent, the survey showed.

“The shift suggests housing sentiment is moving from outright pessimism toward stability rather than a broad-based return of bullish expectations,” Evertrust research manager Daniel Chen (陳賜傑) told a news conference in Taipei.

Buildings under construction in Taipei are pictured on Tuesday.

Photo: Ann Wang, Reuters

The government’s new stimulus program for first-time homebuyers, which took effect last month, has become more targeted, with eligibility limited to applicants under 50 years old with annual income not exceeding NT$2 million (US$62,933).

That explains why about 65 percent of respondents supported the age limit, while 67 percent backed the income cap, Chen said.

The measures, along with the central bank’s selective credit controls, have helped drive investors out of the market, leaving demand from owner-occupiers as a dominant source of support, he said.

However, tighter mortgage lending remains a major constraint, Evertrust general manager Yeh Ling-chi (葉凌棋) said.

The median rate on first-home mortgages has risen to 2.6 percent, while rates on second-home loans have climbed to 2.9 percent, increases of 54 and 72 basis points respectively, Evertrust data showed.

Some lenders are also taking one to three months to review and disburse property loans amid strong demand for corporate financing, including from Taiwanese technology companies expanding overseas, Yeh said.

In some cases, borrowers are being pushed back to January next year, as banks prioritize developer-arranged property loans and affluent customers, he said.

“That is limiting the ability of buyers to transact even as housing sentiment improves,” Yeh said.

Evertrust expects existing-home transactions to edge higher in the fourth quarter, while prices remain broadly stable.

Housing transactions nationwide fell 2 percent in the first seven months of this year from a year earlier, although the pace of decline has continued to narrow amid a strong economy, Yeh said.

The recent easing of second-home lending rules could help revive demand, but continued credit restrictions are likely to limit the scale of any rebound, he said.

For the full year, housing transactions are expected to range between 256,000 and 267,000 units, representing a decline of 2 percent or an increase of 2 percent from last year, he added.