A majority of prospective home buyers would cut their budget or postpone their purchase if the central bank raises interest rates again tomorrow, a survey by Sinyi Realty Inc (信義房屋) showed yesterday.
Taiwan’s only listed real-estate broker arrived at the prediction after conducting an online survey between Thursday last week and yesterday.
Interest rates for home purchases would climb to 1.86 percent for new mortgages, the highest since 2016, if the central bank raises its policy rate by another 0.125 percentage points as expected, Sinyi research manager Tseng Ching-der (曾進德) said.
Photo: Hsu Yi-ping, Taipei Times
The move would mean an extra financial burden for home owners and nearly 40 percent of prospective owners would cut their budget for home purchases to avoid overly leveraging, the analyst said, adding that people have generally felt the pinch this year because of rising prices of consumer goods.
Another 16 percent said they would put off purchasing a home on concern over further monetary tightening, it said.
Only 41 percent of respondents indicated that they would go ahead with their plans to purchase a home regardless of interest rates.
The remaining 4 percent did not express a view.
The central bank would make known its monetary policy intentions after a quarterly board meeting tomorrow afternoon.
Taiwanese have grown used to low interest rates and have turned cautious following two previous rate hikes that raised borrowing costs by 37.5 basis points so far this year, Tseng said.
Sinyi suggested potential home buyers assume interest rates of 2 percent on their mortgages and cut their dependence on grace periods when calculating their finances.
Separately, more than 80 percent of institutional investors backed commercial property as a positive investment tool with stable income, although they were divided about the nation’s economic outlook, a survey by Colliers International Taiwan (高力國際) found yesterday.
While 43 percent of respondents were negative about the nation’s economy in the next 12 months, 35 percent held a bullish view, the property consultancy said.
More than 80 percent of developers, life insurers, investment institutes and asset management companies remained upbeat that commercial properties would generate stable income and they would keep looking for investment targets, it said.
Logistics and warehousing facilities were most sought-after, followed by industrial complexes, plots of land and office space, the survey showed.
COVID-19 outbreaks, global supply chain realignment and capital repatriation have led to Taiwanese companies returning home and lent support to the formation of new technology clusters, it said.
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