People’s willingness to buy a new home hit a 37-month low this month as central bank interest rate hikes dampened market sentiment, a survey released yesterday by Cathay Financial Holding Co (國泰金控) found.
The index of people’s willingness to purchase a new home fell to minus-53.5 this month — the lowest since June 2019 — from minus-52.6 a month earlier, the results showed.
Cathay Financial researchers calculate the index by subtracting respondents who do not plan to buy a new house from respondents ready to do so. An index in negative territory indicates that more respondents do not think it is the right time to buy a home.
Photo: Tu Chien-jung, Taipei Times
The index of people’s willingness to sell a home fell to an 11-month low of minus-12.2, compared with minus-8.3 a month earlier — as respondents showed a lower interest in buying or selling a home.
Cathay Financial said the primary reason for the change is that the central bank has raised interest rates, which increases borrowing costs on a new home.
The survey was conducted between June 1 and June 7, before the central bank on Thursday announced a second rate increase of 12.5 basis points.
Fifty-one percent of respondents said that they would be less willing to buy a home if the central bank raised interest rates again, while 43 percent said they are not interested in buying a new home now.
Only 6.5 percent of respondents said their willingness to buy a new home would not be affected by a rate increase, as their mortgage burden would be relatively low given their current income.
The top three reasons for buying a new home were because of a marriage, an upgrade or an investment, the results showed.
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