Changes to the Equalization of Land Rights Act (平均地權條例) might trigger panic selling of presale house purchase agreements and weigh on overall property deals, real-estate analysts said yesterday.
The amendments, which cleared the legislature yesterday morning, would ban transfers of presale house purchase agreements and require legal entities to obtain permission from their respective governing authority before buying a residential unit.
Evertrust Rehouse Co (永慶房屋) said the legislation in essence limits presale housing projects to buyers with real demand and puts an end to people profiting from reselling purchase agreements that cost relatively little.
Photo: CNA
“The revisions aim to stem short-term property speculation for presale and existing housing, which would help make house prices in Taiwan more reasonable,” Evertrust Rehouse deputy research head Chen Chin-ping (陳金萍) said, adding that unaffordable housing has ranked the No. 1 public complaint over past few years, especially among young people.
Investment-minded holders of presale house contracts would opt out and take a loss if necessary, as some would not have the financial means to absorb the mortgage burdens, Evertrust Rehouse said.
The legislation should succeed in calming house price increase expectations and prevent a bubble from forming, the broker said.
Sinyi Realty Inc (信義房屋) said the requirement that legal entities gain approval before buying real estate would slow luxury house transactions and dampen capital repatriation.
Some people have channeled money from abroad to buy luxury houses in Taiwan to dodge stiff income taxes abroad, while others have used upscale housing to protect themselves from inflation, Sinyi said.
The amendments could discourage such practices, which noticeably cooled last year due to interest rate hikes, unfavorable tax terms and other headwinds, Sinyi said.
H&B Realty Co (住商不動產) said that the slowdown in the local housing market has to do with the amendments being proposed in July last year.
Investors have since fled the market, although they were hoping the government might back off, H&B research manager Jessica Hsu (徐佳馨) said.
“Panic selling looks inevitable and might cause a splash,” Hsu said.
However, it is too early to tell if there would be evident housing price corrections, she said.
Rather, the requirement to gain permission might discourage urban renewal projects, Hsu added.
SEE LAWMAKERS ON PAGE 1
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS