Sunday, August 14, 2011

The recent slow down in Taiwan's property market

l  Housing transactions in Taiwan in the second quarter of this year decreased by around 20 percent in Taipei and New Taipei Cities compared with the same period last year, primarily as a result of the June 1 luxury tax. Since the luxury tax—imposed on non-self-use homes sold within two years of purchase—was intended to curb short-term speculation of real properties in Taiwan, the Ma administration believes this policy has proved to be successful and helped stabilize the island’s property market, particularly in northern Taiwan.

l  Though the number of total houses sold around Taiwan—at 200,445—between January and June was roughly the same as last year’s level, the number of houses sold in the second quarter, during which the luxury tax was hotly debated in the legislature and enacted on June 1, actually declined 8.76 percent, indicating a slowdown in the housing market. The decline was more evident in northern Taiwan than in the south since most of the short-term speculation concentrated in northern cities like Taipei and New Taipei Cities.

l  While the number of property transactions has suffered a decline in the second quarter, the average housing prices have remained relatively the same since the implementation of the luxury tax. Without a significant drop in housing prices, many young people and their families still cannot afford to buy a house in Taiwan’s leading metropolitan areas.

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