Home transactions and housing prices could remain unchanged or rise slightly in the first half of next year due to a relatively high comparison base this year, Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) research fellow Arisa Liu (劉佩真) said on Thursday.
This year, the property market continues to be supported by historically low interest rates in a market awash in ample liquidity, while many equity investors have chosen to lock in their gains and reallocate money to real estate, Liu said.
Many people buy homes to fend off inflationary pressure, Liu said, citing a survey in which 66 percent of respondents preferred to invest in real estate, while 37 percent preferred equity markets.
Photo: I-Hwa Cheng, Bloomberg
The preference for investing in real estate is expected to continue to shore up the local property market next year, she added.
Business sentiment among property developers last month weakened from September, TIER data showed, as few new projects were launched, while the delay of projects by some property developers also made the industry cautious.
However, property sales in Taiwan remained strong, Liu said, citing a sequential increase of 11.3 percent in commercial and residential property transactions to 23,810 units in the nation’s six special municipalities last month.
Transaction growth was largely due to eased concerns over a domestic outbreak of COVID-19 cases, which prompted many property investors and home buyers to jump into the property market, and helped to keep home prices at relative highs, she said.
The central bank is likely to follow the US Federal Reserve in an expected cycle of rate hikes in the middle of next year, although local rates are expected to remain lower than the US Fed’s, while the hikes’ effects are likely to be acceptable to the property market, Liu said.
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