Steep building costs keep housing prices high: finance minister
Finance Minister Chang Shengford said that housing prices are unlikely to drop 10-20 percent this year, as prospective buyers are expecting, because construction companies and housing agents are not willing to lower their prices.
Some builders have complained that high taxes are slowing down the housing market and they are hoping that the government would reduce real estate taxes, but in the meantime, they have no intention of dropping their prices, he said.
Chang said he did not buy into the tax argument, but rather thinks that construction companies have earned more than enough in the past 10 years to survive in the current sluggish housing market.
It is unreasonable to expect the government to rescue the housing market by lowering taxes, the minister said.
As a matter of fact, housing prices have dropped this year by an average 3-5 percent, but prospective buyers have been expecting a bigger decline of 10-20 percent, he said.
Recently surveys by local think tank Taiwan Housing found that the outlook for the housing market has been affected by stock market fluctuations and a combined house and land tax that will take effect next January.
Despite those factors, however, more than 60 percent of prospective buyers are willing to purchase real estate after viewing, but 50 percent of those buyers who put forward an offer expect the sellers to reduce the property price by no less than 20 percent, the polls found.