Taipei, Aug. 2 (CNA) Transactions of residential and commercial properties in Taipei and New Taipei for July rose more than 15 percent from a month earlier as the impact of the luxury tax faded, according to statistics released Friday.
Citing the statistics, Yung Ching Realty Group, one of Taiwan's leading property sales agencies, said transactions of shops, offices and homes in the two major cities located in northern Taiwan grew 15.8 percent month-on-month in July, two years after the implementation of the luxury tax.
Effective from June 2011, the luxury tax is aimed at curbing soaring property prices in the local market, in particular in northern Taiwan.
Under the tax scheme, a 15 percent tax was introduced on second homes not occupied by the owners and sold within one year of purchase. For such homes sold within two years of purchase, the sales tax was set at 10 percent.
Huang Shu-wei, an analyst with Yung Ching Realty, said that a lot of sellers put their properties bought before the tax implementation up for sale as they were not subject to the tax levy.
On the back of an increased supply in the market, property sales in Taipei totaled 4,043 units in July, up 20 percent from June, while transactions in New Taipei for July rose 13.7 percent from a month earlier to 8,066 units, Huang said.
Huang said the Neihu District of Taipei attracted many home buyers last month, when property developers launched new residential property projects and supply of second-hand homes expanded in the area.
For New Taipei, booming new home sales in Xinzhuang, Zhonghe, Xindian and Banciao districts boosted the entire transactions in the city, Huang said.
Huang said that as the central bank will keep interest rates low in a bid to boost the local economy, property transactions in the two cities are expected to stay stable in the second half of this year.
The local media cited statistics compiled by Sinyi Realty Inc., another property agency, as reporting that sales of residential and commercial properties for July in Taichung and Tainan rose 17 percent and 12 percent, respectively, from June to hit 5,198 units and 2,163 units.
On the back of the July sales growth in July, the construction sector on the Taiwan Stock Exchange ended up 1.25 percent, with Cathay Real Estate Development Co. up 7 percent, the maximum daily increase, to close at NT$22.85, and Kindom Construction Corp. up 3.28 percent to end at NT$47.25.
(By Stacy Wu and Frances Huang)ENDITEM/J