Sales Halved, Prices Stuck: Sellers' Mindset Slow-Motion Slicing Taiwan's Property Market

Taiwan's real estate market is currently in a peculiar state, characterized by a sharp decline in transaction volume despite prices refusing to budge significantly. This "price support and volume contraction" phenomenon defies the typical market dynamic where prices usually follow trading activity. Experts describe this as a "slow-motion slicing" of the market, where corrections happen gradually rather than through a sudden crash.

The primary driver behind this trend, according to Chen Biyuan, director of Gaoyuan Real Estate Appraisers, is the psychological principle of "loss aversion." Most property owners are anchored to their original purchase price and are unwilling to sell for less, even when the market cools. They factor in holding costs like interest and taxes, further solidifying their price expectations. This leads to a market with many listed properties but few actual sales, creating a "trading but not transacting" situation.

Developers are also exhibiting similar behavior. Burdened by land acquisition costs, construction expenses, and financing pressures, they are reluctant to offer substantial price reductions. This collective resistance from both individual sellers and developers provides a floor for market prices, preventing a sharp downturn. However, Chen notes that not all segments are stagnant. Some developers with lower early-stage costs or owners with minimal holding expenses are willing to accept slightly lower profits to exit the market, leading to isolated cases of price concessions.

Historically, property markets tend to see trading volumes shrink first before prices adjust. When buyer interest remains weak and sellers refuse to lower their prices, the market enters a prolonged period of consolidation. Chen suggests that many sellers are adopting a "better dead than alive" mentality, preferring to extend their selling timelines rather than accept a significant price cut. Consequently, the market is likely to continue its pattern of price support and low volume, awaiting a clearer direction.