COST OF LIVING/Property transactions in 6 major cities fall 13% month-on-month in July

Taipei, Aug. 6 (CNA) Residential and commercial property transactions in Taiwan's six largest cities fell by more than 13 percent in July from a month earlier with Tainan and Kaohsiung in the south experiencing the most significant drops, according to statistics compiled by these local governments.

The transactions of homes, offices, and shops in Taipei, New Taipei, and Taoyuan in the north, Taichung in central Taiwan, and Tainan and Kaohsiung in the south totaled 18,477 units in July, down by 13.3 percent from a month earlier, according to the data. However, the July figure rose by 5 percent from a year earlier.

In Tainan, housing transactions plunged by 18.2 percent from a month earlier to 1,836 units, while sales of residential and commercial property in Kaohsiung fell by 20.2 percent from June to 2,680 units this month.

As for the other cities, which saw relatively milder month-on-month declines, housing sales in Taipei, the most closely-watched property market in Taiwan, fell by 7.3 percent to 2,273 units in July; transactions in New Taipei, Taiwan's most populous city, dropped 12.9 percent to 4,697; sales in Taoyuan fell by 3.4 percent to 3,539 units; and transactions in Taichung fell by 17.6 percent to 3,452 units.

In the first seven months of this year, housing transactions in the six major cities fell by 1.4 percent from a year earlier to 149,982 units, the data indicated.

Tainan, Kaohsiung

Chen Chin-ping (陳金萍), a research manager with Yung Ching Realty Group, said buying in Tainan had seemed strong since last year as large tech giants raised their investments in the Southern Taiwan Science Park with increasingly more tech talent rushing to buy homes in the city.

Due to a spike in home prices caused by this stronger buying interest, property investors and prospective home buyers in Tainan had become more cautious, resulting in lower transactions, Chen said.

Regarding Kaohsiung, Chen said housing transactions in the city fell to a 21-year low for July. The property market in Kaohsiung had been boosted after Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, announced in November 2021 it would build a wafer fab in the city.

Dampened market sentiment

Tseng Ching-der (曾敬德), a research manager with Sinyi Realty Inc., said the slower property markets in the six cities in July also reflected dampened sentiment due to an ongoing domestic COVID-19 outbreak after daily cases breached 10,000 at the end of April for the first time since the pandemic began, and the impact appeared more serious than June, when housing sales in the six cities dropped by 6.7 percent from May.

Tseng said a move by the local central bank to tighten its monetary policy and volatility in the equity market were expected to continue to put pressure on the property market.

Despite the fall in transactions, Jessica Hsu (徐佳馨) of H&B Business Group said it was hard to see prices of newly built homes moving lower since building materials had become more expensive along with higher labor costs.