Real Estate Market Significantly Slows Downtrend in Key Urban Areas

In a recent development, Taiwan's property market has experienced a significant slowdown, as housing transactions decreased across several major cities. According to data from H&B Realty, transactions in Taoyuan, Tainan, New Taipei City, Taipei, Kaohsiung, and Taichung decreased by 30.4%, 37.4%, 34.3%, 33.4%, 35.4%, and 25.1% respectively, resulting in a combined drop of 32.1% in the six special municipalities.

This downturn can be attributed to central bank lending restrictions and US tariffs, as reported by local news outlets. In August last year, the central bank urged lenders to voluntarily tighten home loans for a year, citing risks of property loan concentration. As a result, lenders have tightened requirements, demanding financial statements to prove borrowers can meet mortgage obligations. Loan processing times have also extended to six months from one-and-a-half months previously to curb real estate lending.

These measures have been particularly felt in Taipei, where the average down payment for young buyers has increased significantly. In the first half of this year, the nationwide average down payment reached NT$3.43 million, up NT$235,000 from the same period last year. However, in Taipei, young buyers face an average down payment of NT$6.68 million, the highest among the six special municipalities. This increase is the most acute, with the average down payment for young buyers in Taipei being nearly NT$1 million higher than a year earlier.

Jessica Hsu, head researcher at H&B Realty Co, warns that upcoming presale project deliveries could exacerbate price pressures. She advises prospective buyers to carefully assess their finances and property locations to avoid falling into negative equity. Hsu, from H&B Realty, also suggests that the future momentum of the property market depends on potential policy shifts, particularly whether the central bank will relax mortgage restrictions.

Upfront costs for homebuyers are rising, according to H&B Realty, making it increasingly challenging for first-time buyers and second-home purchasers to enter the market. The property market in Taiwan has thus entered a correction phase, with buyers largely staying on the sidelines.

Despite the challenges, Hsu remains optimistic about the future of the property market. She encourages buyers to approach the market with caution and to seek professional advice when making property decisions. With careful planning and strategic decision-making, she believes that the market will recover and continue to thrive in the long run.