TAIPEI: Housing transactions in the nation’s major municipalities plummeted 40 percent last month from a year earlier, as cold weather and policy uncertainty drove buyers to the sidelines until a government transition is completed, brokers said yesterday.
Existing home sales totaled 11,565 units in the six special municipalities, representing a 40 percent drop from a year earlier and a 68 percent retreat from December last year, when sellers rushed to close deals to avoid stiff property taxes this year, brokers said.
The latest trading volume is the lowest since local governments launched the survey in 1999, suggesting the market has yet to hit the bottom and the rebound in December was just an isolated incident, Evertrust Rehouse Co assistant manager Chung Yin-lin said.
The week-long cold spell late last month kept potential buyers at home and lingering policy uncertainty dampened purchase interest, Chung said, adding that the disappointing economy has lent support to caution.
Home transactions are bound to further soften this month, as the Lunar New Year holiday is to shorten working days, Chung said.
The Lunar New Year holiday begins on Sunday and runs until Feb. 14 this year.
People are likely to take vacations in Taiwan or abroad during the holiday and put off home purchase plans, Chung said.
“That suggests an even bleaker market in the current month and beyond,” Chung said.
Property transactions tumbled 42.2 percent to 1,416 units in Taipei last month and 37.9 percent to 2,838 units in New Taipei City, according to local governments’ data.
Taoyuan saw its number of deals shrink 42.1 percent to 1,898 last month and Taichung reported a 46.3 percent decline to 2,282, the local governments’ Web sites said.
Tainan and Kaohsiung logged a decrease of 39.1 percent and 29.7 percent to 1,039 and 2,092 transactions respectively, the two governments said.
The market might not emerge from holiday disruptions until next month or April, and could take longer to recover, Sinyi Realty Inc researcher Tseng Chin-der said.
A new Cabinet is to be appointed in May when Democratic Progressive Party Chairwoman Tsai Ing-wen assumes the presidency and appoints a new government, analysts said.
Potential home buyers, especially those with asset allocation plans, are expected to wait and see until they gain a better understanding of new policymakers and their policy directions, analysts said.
The market is unlikely to regain vigor in the absence of price corrections of 10 percent to 15 percent, analysts said.