Taipei property transactions rise 13.5% in July, but market momentum remains weak

Taipei's property market saw a notable uptick in July, with building sales transactions reaching 2,352 units. This represents a 13.5% increase compared to the same period last year and a significant 17.5% rise from June. Year-to-date, from January to July, the total number of transactions stands at 14,340 units, a 3.8% increase over the previous year.

Su Chin-cheng, chairman of the Taipei Real Estate Agents Association, attributed the stable July market to investors diversifying from the booming stock market, which has been trading between 40,000 and 50,000 points. He anticipates that upcoming elections might lead to a relaxation of policies, potentially including the lifting of restrictions on purchasing second homes, which could further stimulate the market.

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The recent stock market has reached historical highs, between 40,000 and 50,000 points. Some investors with high profits are cautious about risks and have shifted some funds into the real estate market, causing July buying interest to remain stable.

Taipei's July transaction growth outpaced the average for Taiwan's six major cities. While Taipei saw a 13.5% year-on-year increase, the six-city average was 8.8%. Similarly, Taipei's 17.5% month-on-month growth exceeded the six-city average of 12.0%. All six major cities experienced both year-on-year and month-on-month increases, indicating a generally stable market across the island.

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Although the transaction volume in July appears stable, it remains at a relatively low level. While mortgage loan restrictions have been slightly relaxed, their effectiveness in boosting buying interest is limited. Although a few investors have transferred profits from the stock market to real estate, it is not enough to support market demand.

However, Su cautioned that the July transaction volume, while improved, remains relatively low. He noted that despite slight easing of mortgage restrictions, the impact on boosting overall buying interest has been minimal. The influx of funds from stock market gains is currently insufficient to provide sustained support for the real estate market. The total transaction volume for the first seven months of the year ranks as the third lowest since 2015, a 22.2% decrease from the peak in 2021. The market has been sluggish for 22 months since the seventh wave of credit controls was implemented in September 2024.

Certain districts, particularly in the city center like Neihu, Wanhua, Daan, Xinyi, Songshan, and Nangang, showed stronger month-on-month growth, with Nangang experiencing a remarkable 152.4% year-on-year increase. This is linked to the recent surge in semiconductor stocks, attracting tech professionals, many under 40, to invest in property as a risk-diversification strategy. Su predicts the second half of the year will be stronger than the first, but advises caution due to the volatile financial markets.

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The stock market has been fluctuating violently recently, with some individual stocks falling and then rising, while others fall and do not recover. The difficulty of operation has increased, and investors' risk awareness has also increased, greatly increasing the probability of profits being transferred to real estate.