Northern Taiwan Pre-Sale Housing Market Hits Nearly 8-Year Low in June

The pre-sale housing market in northern Taiwan experienced a significant downturn in June, with new project sales totaling just over NT$10 billion. This figure marks the lowest monthly sales value since early 2019, indicating a near eight-year low and highlighting a cooling market.

Market analysis reveals a decline across several key indicators. The number of new pre-sale projects launched and the average number of viewings per group of potential buyers both decreased compared to the previous month. While the number of transactions, negotiation rates, and the volume of available properties remained stable, the overall trend points towards sluggish demand. The number of new completed homes, however, saw an increase.

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The market outlook remains unclear. In June, new projects in northern Taiwan entered a vacuum phase, with monthly pre-sale project sales totaling only over NT$10 billion, a decrease of more than NT$60 billion from the previous month. This is the lowest monthly volume since early 2019, even worse than during the pandemic.

Industry experts attribute the slump to prevailing market uncertainty and a conservative monetary policy stance by the central bank, which is closely watching U.S. interest rate movements. With local government elections on the horizon, policymakers are expected to maintain a cautious approach. The continued attractiveness of the stock market as an investment avenue is also drawing funds away from real estate, suggesting that significant improvements in housing market activity are unlikely this year.

The backlog of unsold new homes in northern Taiwan is approaching 1,600 units, with significant concentrations in Hsinchu County and City, and New Taipei City. The rapid launch of major projects in Hsinchu earlier in the year, combined with New Taipei City's status as the largest urban area in Taiwan by housing volume, has led to a growing inventory, particularly in the less central "protein" areas of the city, where sales pressure is mounting.

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The direction of U.S. interest rate hikes remains uncertain, leading the Taiwan Central Bank to adopt a conservative stance on rate increases. Especially with the upcoming county and city mayor elections, policies will tend to be more conservative. Coupled with the stock market's sustained appeal in absorbing funds, it is expected that housing market sales this year will not show outstanding performance.