The primary reason why the real estate market is expected to remain stable in Taiwan is the excess of liquidity in the country. The economic forecast of 1.74 per cent growth in 2013 and 2.59 percent in 2014 is likely to lend further support to the local housing market which is already blooming.
Based on statistics from the Ministry of the Interior, 306,476 units were transacted for the first 10 months of this year, reflecting a 13% rise from last year.
The U.S. Federal Reserve moderate scaling back of its monthly bond buying by 10% and its decision to keep short term interest rates exceptionally low ensures that world markets will stay relatively calm and global liquidity levels remain high.
According to Michelle Yeh of Yung Ching Realty, a leading property sales agency, ‘Taiwan’s interest rates will stay low which could serve up growth to sustain the local property market.’
Many consumers are still eager to buy a home as a residential property and that housing transactions in Taiwan for 2014 are expected to continue to grow, while home prices are expected to remain stable and even grow slightly.’
With mild local inflation, some foreign banks are even anticipating that the central bank interest rate will not be raised until the fourth quarter of 2014.
The government plans to fine tune the luxury tax to curb high housing prices.
That said home prices in Hsinchu, Taichung and Tainan could face downward pressure because of a property supply glut.
Authorship: Zen Tan