40% see H2 as good time to buy: real es­tate

The China Post - - LOCAL -

Nearly 40 per­cent of peo­ple sur­veyed thought that the sec­ond half of this year will be a good time to jump into the hous­ing mar­ket, be­fore a tax re­form takes ef­fect on Jan. 1, 2016, ac­cord­ing to a sur­vey con­ducted by a real es­tate com­pany.

Yung Ching Realty Group, one of Tai­wan’s lead­ing real es­tate sales agen­cies, cited its sur­vey as say­ing that about 38 per­cent of re­spon­dents wanted to take ad­van­tage of the pe­riod be­fore the tax re­form goes into ef­fect to buy a home in the sec­ond half of the year.

The sur­vey, how­ever, may not be rep­re­sen­ta­tive of po­ten­tial home buy­ers in Tai­wan as it was a non- sci­en­tific poll con­ducted only on Yung Ching’s mem­bers, who in­clude peo­ple who use the com­pany’s web­sites to find homes for pur­chase or rental. And it was con­ducted through a ques­tion­naire e-mailed to the mem­bers.

Ear­lier this month, the Leg­isla­tive Yuan ap­proved a tax re­form plan pro­posed by the Min­istry of Fi­nance that will im­pose a cap­i­tal gains tax of up to 45 per­cent on prof­its made on the sale of homes.

To pre­vent prop­erty spec­u­la­tion, which have pushed up hous­ing prices to un­af­ford­able lev­els for many, sellers will be taxed more if they were not liv­ing in the prop­erty and had not owned it for a cer­tain num­ber of years, un­der the new tax mea­sure. The new tax will af­fect trans­ac­tions tak­ing place in 2016.

Last year, trans­ac­tions of homes, shops and of­fices fell al­most 14 per­cent an­nu­ally to 320,598 units, while in the first four months of this year, they dropped 18 per­cent year-on-year to 87,567 units, ac­cord­ing to Min­istry of the In­te­rior’s sta­tis­tics. The fall­ing prop­erty sales re­flected con­cerns over un­cer­tainty be­fore the tax re­form was fi­nal­ized.

Yung Ching said that the 38 per­cent of the re­spon­dents in its sur­vey fa­vor­ing buy­ing a home was the high­est level in eight quar­ters, adding that it is pos­si­ble that mo­men­tum in the lo­cal prop­erty mar­ket will pick up.

Along with the higher buy­ing in­ter­est in the third quar­ter, the sur­vey showed that 57 per­cent of the re­spon­dents be­lieved that home prices will fall 3-10 per­cent in three months on hopes that the new cap­i­tal gains tax could rein in sky­rock­et­ing prop­erty prices.

The sur­vey showed that 45 per­cent of the re­spon­dents ex­pected home prices will fall over the next year.

Huang Shu-wei, an an­a­lyst with Yung Ching, said that home buy­ers should seize such a good buy­ing op­por­tu­nity as lo­cal prop­erty prices are ex­pected to trend lower with sellers ex­pected to rush to dis­pose of their prop­erty by ask­ing for less be­fore the tax goes into ef­fect.

Yung Ching said its sur­vey con­ducted in May gen­er­ated 1,304 valid re­sponses.

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