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