The local property market remained weak in November, with the housing index, which gauges the market climate, trending lower and flashing a blue light signaling a contraction, real estate market magazine My Housing (????) said Thursday.
After flashing a yellow-blue light in October for the second consecutive month, the local housing index fell 1 point from a month earlier to 31.2 in November, representing a blue light and indicating that the local property market turned weaker during the month.
The magazine uses a five-color system to describe the local property conditions, with red indicating overheating, yellow-red showing fast growth, green representing stable growth, yellow-blue signaling sluggish growth and blue indicating contraction.
According to My Housing, it will be impossible for the housing index to flash a stable green light for 2016, marking the third consecutive year in which the index will not flash a green light. The three year slump could be the longest period of weakness in the local property market since the magazine started to tally the index 15 years ago.
Ho Shih-chang (???), a research manager at the magazine, said that although the housing index flashed a yellow-blue light in September and October, the scores remained at the lower end of the yellow-blue category, which is below 32 points.
Prior to September, the housing index only flashed a yellow-blue light in April and July in 2016, while the index in other months flashed a blue light.
"Market sentiment has been fragile, so that transactions in the local property market fell, paving the way for a decline in the housing index," Ho said.
Data compiled by the Ministry of the Interior shows that transactions of residential and commercial property in Taiwan for the first 10 months of this year totaled only 197,039 units, compared with 220,725 units recorded over the same period of last year.
Real estate market analysts have widely anticipated that transactions of homes, shops and offices for the whole of 2016 could fall below 250,000 units, down from 292,550 units in 2015.
In the first 11 months of this year, housing transactions in the country's six major cities, the most closely watched property markets, generally trended lower, with sales in Taipei, New Taipei, Taichung, Tainan and Kaohsiung down 21 percent, 11 percent, 19 percent, 14 percent and 6 percent, respectively, from a year earlier. Taoyuan was the only one of the six to register a 7 percent year-on-year increase in housing transactions during the period.
"Many home buyers have anticipated that house prices will continue to fall, while many homeowners remain reluctant to cut prices for the moment. Under such circumstances, the pace of making deals in the local property has been slow, pushing down transactions," Ho said.
Among the six factors in the housing index, the sub-index for property developers launching new housing projects for presale fell to 6.17 from October's 6.53, indicating weak confidence in the market, according to Ho.
In addition, the sub-index for housing advertisements for November also dropped to 4.79 in November from 5.38 seen in October, which served as additional evidence of the weak property market, the magazine said.
Source: Focus Taiwan News Channel