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Talk of the Day -- Housing sales up amid capital gains tax debate

2012/05/02 22:46:05

Housing sales increased significantly around Taiwan in April even though stock transactions declined during the month over stock capital gains tax concerns, according to local media reports.

Citing statistics compiled by land developers and real estate realtors, the reports said April's housing sales volume exceeded that recorded in March by 10 percent.

In contrast, the daily trading volume of the local bourse shed by an average of NT$40 billion (US$1.37 billion) during the same period.

"Such a disparity is rare as the local property sales tend to be closely interacted with stock transactions over the past decade," said Shining Group Chairman Lai Cheng-yi.

With housing sales continuing rising and prices of luxury property skyrocketing, the Central Bank of the Republic of China is mulling new selective credit control measures to cool real estate speculation, media reports said.

The following are excerpts from the local media coverage of latest developments in local real estate market amid capital gains tax debate:

United Evening News:

Property realtors said recent increases in housing sales are mainly fueled by inflationary concerns due to looming hikes in electricity rates and fuel prices.

"Most houses sold in April are for self-use," Lai said, adding that home buyers make purchases mainly as a hedge against inflation.

According to Yung-Ching Realty Group, housing sales in metropolitan Taipei posted a 17 percent month-to-month increase in April.

Statistics compiled by Sumitomo Realty and Development Co.'s Taiwan branch show that housing sales in Kaohsiung outpaced volumes posted in all other cities with a 21 percent growth. Property sales in the central city of Taichung also increased 17 percent.

A Yung-Ching Realty manager said housing sales in central and southern Taiwan have returned to the normal levels before the launch of luxury tax in last June.

In Taipei, he said, 63 percent of houses sold in suburban areas in April were bought by first-time home buyers. There were also many residents bought new houses in suburban areas after selling their old homes in downtown districts, he added. (May 2, 2012).

Commercial Times:

Banking sources said the central bank plans to tighten lending to luxury home buyers as part of its efforts to stabilize domestic consumer prices.

Senior bankers and financial regulators are concerned about substantial hikes in luxury houses in metropolitan Taipei in recent months -- exceeding NT$3 million per ping (3.3 square meters), the sources said.

Central bank officials said they believe that the price hike was mainly the results of speculative trading by land developers and property realtors.

Banking sources said the central bank plans to work out new selective credit control measures at its quarterly board meeting in late June to further limit loans to buyers of houses that are worth more than a specified amount.

The central bank will also cooperate with the Financial Supervisory Commission to require local banks to step up internal monitoring of real estate-related loans. (May 2, 2012).

(By Sofia Wu)