Taipei, Jan. 8 (CNA) The housing market in Taiwan, which has been overheated for the last seven years, is expected to slow down with the price decreasing by 20-30 percent in 2012, experts said Sunday.
The housing transaction in 2011 was estimated at around 363,000 units, a record low in eight years and a drop of 10 percent from 2010, according to Chinatrust Real Estate Co.
As a result of global stock market declines and Taiwan's introduction of luxury tax last July, forecasts for the property market have become more conservative, My Housing Magazine said.
The magazine said the value of new housing projects and newly built houses in northern Taiwan for 2011 was estimated to fall to NT$821 billion from NT$1.023 trillion (US$33.9 billion) -- the previous forecast earlier that year.
Compared with NT$930 billion recorded in 2010, the value in 2011 shrank by 11.7 percent or NT$109 billion, to about the same level as when the global recession hit in 2008, the magazine said.
Although the number of new housing projects was increasing over the years, the actual transaction rate of pre-sales and new houses dropped from 79 percent in 2003 to lower than 50 percent in 2006 and hit the lowest level of 40 percent in 2011, as the price became unaffordable for ordinary buyers, the magazine said.
Housing price is just too high for workers, said Chang Chin-oh, a professor of land economics at National Chengchi University.
The growth of salary was far lower than the housing price and so it is reasonable to predict a 30 percent fall in price, he said.
However, the commercial real estate's market in 2012 will not be affected by the gloomy economy.
According to Jones Lang LaSalle, a multinational financial and professional services company, the transaction of commercial buildings stood at NT$120 billion in 2011, an increase of 41 percent over 2010 and a record high since the country allowed international property investors to buy commercial real estate in 2002.
(By Feng Chao and Maia Huang)