Property transactions last month plunged 47.5 percent year-on-year to 12,613 units in the nation’s six special municipalities, as an ongoing economic slowdown and the Lunar New Year holiday drove buyers to the sidelines, real-estate brokers said on Wednesday.
The volume was a 39.2 percent retreat from a month earlier, suggesting weak sentiment at the start of this year, said Evertrust Rehouse Co (永慶房屋), the nation’s largest broker by number of offices.
“Property transfers in January slumped to the lowest level in nearly four years, dragged by economic uncertainty and unfavorable policies,” Evertrust Rehouse deputy research manager Chen Chin-ping (陳金萍) said, citing the ban on the resale of presale contracts, interest rate hikes, and a softening economic outlook at home and abroad.
Specifically, deals in New Taipei City and Kaohsiung plummeted 58.2 percent and 48.7 percent respectively, their worst showings in 13 years, Chen said, adding that the pace of decline exceeded 40 percent in Taipei, Taoyuan, Taichung and Tainan.
The nation’s economy last quarter contracted 0.86 percent, reversing three previous quarters of growth, as exporters struggled with capacity and inventory adjustments that appear worse and longer than expected, Directorate-General of Budget, Accounting and Statistics data showed.
Major technology companies have provided conservative guidance for business this quarter and beyond, and have cut or postponed capital spending to cope with poor order visibility.
That scenario means the government and consumers have to assume the role of growth drivers.
The statistics agency is to update its GDP forecast later this month.
In addition, four interest rate hikes last year pushed mortgage burdens in December to a seven-year high and rates are likely to climb further as inflationary pressures remain higher than the central bank’s 2 percent target, Chen said.
Housing and construction loans in December advanced at the softest pace in three years to NT$9.38 trillion (US$315.6 billion) and NT$3.98 trillion respectively, suggesting tightening measures had achieved their intended effect, the central bank said.
The monetary policymaker has sought to induce a soft landing for house prices and urged caution in financial leveraging on concerns economic downside risks would intensify this year.
The timing of the Lunar New Year holiday also contributed to the property market’s poor performance, Evertrust Rehouse said.
The 10-day holiday fell entirely in January this year, while partly falling in February last year, and cut working days by 25 percent from a year earlier, Chen said.
People assigned more importance to grocery shopping, house cleaning and family reunions over the holiday, but might resume house hunting this month, Chen added.
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