Housing market freezes: Pre-sale units drop below 10,000, a 6-year low; are prices bottoming out?

The Taiwanese real estate market is showing signs of cooling, with the number of pre-sale housing units revealed nationwide during the 329 property fair (March-May) plummeting to 9,645. This figure represents a six-year low and reflects a market entering a calmer period after a substantial price increase.

In contrast to the overall trend, New Taipei City and Hsinchu saw a resurgence in buyer interest in May. New Taipei City's pre-sale listings rose to 963 units from 784 year-on-year, while Hsinchu saw an increase from 95 to 260 units. Taipei City remained stable, with a slight increase of 4 units to 373 listings. However, Taoyuan, Taichung, and Kaohsiung experienced year-on-year decreases.

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In areas outside of Taipei and New Taipei, buyer interest has cooled the most. Developers who react quickly and control costs well are no longer challenging regional high prices and are returning to market prices.

According to Tseng Ching-te, a project manager at Sinyi Realty's real estate research department, the typical monthly volume is around 7,000 units. He noted that the past two 329 property fairs have been slow, primarily because consumers, facing high property prices, are no longer convinced that prices will inevitably rise next year. Instead, they are observing the market for signs of price softening and waiting for opportune moments to buy.

Developers who are quick to react and manage costs effectively, particularly in regions outside Taipei and New Taipei, are beginning to align their pricing with current market conditions rather than aiming for previous regional highs. This strategic adjustment could signal a potential bottoming out of prices, creating an opportunity for buyers to re-enter the market. The current market is characterized by individual project performance, with unique offerings like those from reputable developers, large-scale projects, or those with limited future comparable opportunities, still finding success.

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In the past, when the market experienced a surge, a few developers who reacted quickly would lower prices to capture the market, which could test the price the market could accept and be more conducive to prices bottoming out and waiting for buyer interest to return.