Hous­ing prices fore­cast to de­cline next year: agency

The China Post - - TAIWAN BUSINESS -

Home prices across Tai­wan are likely to trend lower next year on ex­pec­ta­tions that an in­ter­est rate hike cy­cle will boost bor­row­ing costs fol­low­ing the end of the U.S. Fed­eral Re­serve’s quan­ti­ta­tive eas­ing pro­gram, on­line prop­erty sales agency HouseFun said.

The mar­ket has widely ex­pected that the Fed will start to raise its in­ter­est rates in mid-2015, which could lead Tai­wan’s cen­tral bank to follow suit, in­creas­ing lo­cal in­ter­est rates for home mort­gages.

In ad­di­tion, the in­creas­ing num­ber of un­sold new res­i­den­tial units is ex­pected to add down­ward pres­sure on prices in the new year, HouseFun said.

Home buy­ers could see a large chunk of un­sold homes in New Taipei and Taoyuan and Hs­inchu in north­ern Tai­wan, the agency said.

The

re­sult

could be

fall­ing prices across most of Tai­wan’s ma­jor ci­ties.

In Taipei, the most ex­pen­sive and most watched mar­ket, prices for 2015 could fall 10 per­cent from 2014, ac­cord­ing to HouseFun’s fore­cast.

Home prices in neigh­bor­ing New Taipei, the most pop­u­lous city and also a tar­get of in­vestor at­ten­tion, could drop even more by 15 per­cent year-on-year, while prices in Taoyuan and Hs­inchu are likely to fall as much as 20 per­cent from a year ear­lier, the agency pre­dicted.

Amid cau­tion to­ward the lo­cal prop­erty mar­ket next year, HouseFun said that most prop­erty de­vel­op­ers are ex­pected to cut con­struc­tion of new res­i­den­tial projects for sale next year.

It said that value of new prop­erty projects to be un­veiled for sale in north­ern Tai­wan over 2015 is es­ti­mated to to­tal NT$830 bil­lion (US$26.1 bil­lion), down about 15 per­cent from the NT$980 bil­lion seen in 2014.

In Kaoh­si­ung in the south, newly un­veiled projects next year could be worth NT$ 100 bil­lion, down from the NT$ 120 bil­lion in 2014, though new projects in Taichung in cen­tral Tai­wan could buck the down­trend to rise about 10 per­cent from a year ear­lier to NT$ 170 bil­lion, HouseFun said.

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