Presale and new home prices rise in the first quarter

FORECASTS:
Presale plans could drop dramatically after stricter property taxes go into effect in July, and sellers keen to exit the market could lower their prices.

  • By Crystal Hsu / reporter

Presale and newly completed home prices in northern Taiwan increased in the last quarter compared to the previous quarter, as developers passed on cost increases related to credit checks and higher building material prices to buyers My monthly accommodation reported last week.

Presale and new home prices rose 0.5-2.2% to record highs in northern Taiwan, except Yilan County, during the January-March period, while developers set prices according to rising construction costs and found support in real demand and economic growth, My monthly accommodation said research director Ho Shih-chang (何世昌).

“The price increases should be sustained given the rising costs of building materials and labor,” Ho said, adding that developers were also looking to pass on the additional costs associated with credit checks and property tax increases on home buyers.

Photo: CNA

Stricter loan terms for land purchases and unsold homes mean higher real estate development costs, as do hefty taxes on home transfers – including presale contracts – within five years of purchase. Ho said.

Taiwan’s robust economy, low interest rates and excessive liquidity would continue to support real demand, Ho said.

Presale and new home prices in Taipei averaged NT $ 902,000 (US $ 32,056) per ping (3.31 m2), up 1.8% from three months earlier, My monthly accommodation mentionned.

The price increases were most evident in the capital’s second tier districts, such as Nangang (南港), Neihu (內 湖), Wenshan (文山) and Beitou (北投), he added, adding that sales rates are healthy.

Presale and new home prices rose 0.5 percent to NT $ 409,000 per ping in New Taipei City, up for the fourth consecutive quarter, according to the publication.

Prices in Keelung hit a new high of NT $ 217,000 per ping and continued to break records in Taoyuan, he said.

Presale and new home prices in Hsinchu rose 2.2% quarter on quarter to NT $ 237,000 per ping, on solid demand and a lack of new supply, he said.

Yilan turned the tide with a 1.4% drop in asking prices, as developers focused on relatively affordable projects in less popular locations, Ho said, adding that the drop would likely be short-lived.

Looking ahead, presale plans could drop significantly after stricter property taxes come into effect in July, Ho said.

Online real estate information provider Ubee (屋 information 房屋) said the number of pre-sale contracts for sale increased by 7,000 in the past month to 35,000 nationwide, ahead of the new property taxes.

Sellers anxious to exit the market would lower their prices, he said.

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Robert Valdivia

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