Taipei, Sept. 8 (CNA) The property market in northern Taiwan flashed a "blue light" in August, pointing to contraction after transactions of homes fell during the month, according to a survey published in the real estate magazine My Housing.
Citing the survey, the magazine said a fall in the listing of newly built residential property and advertising for property sales also supported growing pessimism over the property market in August.
According to the survey, the housing index for northern Taiwan fell 1.3 points from the previous month to 30.9 points, flashing a blue light after five yellow-blue lights in a row, a category that ranges from 32-42 points.
The index covers major counties and cities in northern Taiwan such as Taipei, New Taipei, Keelung, Taoyuan, Hsinchu and Yilan, which account for more than 50 percent of total residential and commercial property transactions in the country.
Under the magazine's color-coded system, red indicates overheating, yellow-red shows fast growth, green represents stable growth, yellow-blue signals sluggish growth, and blue indicates contraction.
The survey was in line with a report which showed transactions of residential and commercial property in the six largest cities in Taiwan -- Taipei, New Taipei, Taoyuan, Taichung, Tainan and Kaohsiung -- fell 15.4 percent from a year earlier to 16,631 units in August.
In particular, transactions of homes, offices and shops in Taipei, the most watched property market in Taiwan, fell 27.8 percent from a month earlier, the steepest decline among the six cities, in August.
Ho Shih-chang (何世昌), a research manager at the magazine, said the decline in transactions reflected the superstitious belief embraced by local consumers that it is unlucky to buy big ticket items such as homes and cars during the Lunar calendar Ghost Month.
This year Ghost month kicked off on Aug. 11 and will run until Sept. 9.
Ho said heavy downpours in central and southern Taiwan in late August also caused serious flooding, which dampened potential home buyers' desire to jump into the market.
Among the six factors in the composite index for the property market, five moved lower and only the sub-index for the listing of pre-sale residential property projects moved higher from 7.26 to 7.99 in August.
In the month, the sub-indexes for the listing of newly-built homes, amount of property advertising, home price negotiations, number of visits by potential buyers, and transactions fell to 4.72, 3.88, 5.12, 5.00 and 4.22, respectively, from 5.27, 4.18, 5.46, 5.38 and 4.69 in July.
Ho said home transactions and the number of visits by potential buyers in northern Taiwan fell almost 10 percent from a month earlier in August, saying the listing of homes located in rural areas was impacted even more by the Ghost Month.
The analyst said if the property market fails to rebound in September, with leading property developers launching new offers for the big annual real estate event on Sept. 29, the slowdown could continue into the upcoming 9-in-1 elections in late November amid uncertainty caused by politics.
(By Wei Shu and Frances Huang)
Enditem/AW