COST OF LIVING/Property sales in 6 biggest cities plunge almost 30% in November

Taipei, Dec. 3 (CNA) Transactions of residential and commercial property in the six largest cities in Taiwan tumbled in November by almost 30 percent from a year earlier, according to statistics released by the six local governments.

The data showed that transactions of homes, shops and offices in the six biggest cities -- Taipei, New Taipei and Taoyuan in the north, Taichung in central Taiwan, and Tainan and Kaohsiung in the south -- plunged by 28.5 percent from a year earlier to 18,565 after a 28.2 percent year-on-year decline in October.

However, the November home, office and shop transactions rose by 8.6 percent from a month earlier, the data indicated.

According to Chen Chin-ping (陳金萍), a research manager with Yung Ching Realty Group, the month-on-month increase only reflected a time lag of about one month between transaction registration and sales, adding that some transactions recorded in November were actually completed in October.

Commenting on the steep year-on-year decline, Chen said with the central bank having launched a rate hike cycle to drain liquidity from the market, home buyers had become more cautious about the market outlook and rushed to the sidelines, with the global economic weakness also being a factor.

Since March, the local central bank has raised its key interest rates for three quarters in a row by 50 basis points to take on inflation, which has moved beyond the 2-percent alert set by the bank. The central bank is likely to increase interest rates again in its quarterly policymaking meeting in December.

Chen said the steep year-on-year decline in home, office and shop transactions also reflected a relatively high comparison basis over the same period last year, when concerns over COVID-19 infections eased.

In November, home and office transactions in Taipei, the most closely watched property market in Taiwan, hit 1,999 units, down 26.3 percent from a year earlier but up 3.8 percent from a month earlier, while sales in New Taipei, the most populous city in the country, totaled 4,238 units, down 40.4 percent from a year earlier but up 10.0 percent from a month earlier.

Transactions in Taoyuan reached 3,724 units in November, down 15.9 percent from a year earlier but up 21.5 percent, while sales in Taichung totaled 4,286 units, down 10.0 percent from a year earlier but up 5.3 percent from a month earlier.

In Tainan, transactions totaled 1,610 units in November, down 27.7 percent from a year earlier and also down 0.7 percent from a month earlier, while sales in Kaohsiung fell 42.6 percent from a year earlier to 2,708 units, which also represented a month-on-month rise of 5.7 percent.

Jessica Hsu (徐佳馨) of H&B Business Group said the significant decline in Kaohsiung resulted from fading buying enthusiasm which was initially sparked by an announcement by contract chipmaker Taiwan Semiconductor Manufacturing Co. that it would build a production base in the city.

In the first 11 months of this year, home, office and shop transactions totaled 223,156 units, falling 7 percent from a year earlier, after a 4.4-percent drop for the first 10 months.

With the exception of Taichung, where sales rose 3.4 percent from a year earlier in the 11 months, the other five major cities recorded year-on-year declines for the 11-month period ranging from 4.3 percent to 14.3 percent, with Kaohsiung suffering the steepest drop.

Hsu said many home sellers were expecting the current inflationary pressure to further boost property prices, but home buyers were anticipating a fall in home prices due to economic weakness so it was not easy for them to strike deals. As such, the local property market is expected to see a decrease in transactions in the short term, she added.