Taiwan housing market's worst may be over as policy limits appear, analyst says

Taiwan's housing market is navigating a complex period, with signs suggesting the most challenging phase may have passed. Despite a continued slowdown in major real estate transactions in June, influenced by holidays and lingering credit controls, year-on-year sales figures show a notable increase. This improvement is attributed to a lower base from the previous year and sustained demand from both owner-occupiers and investors.

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The market's worst situation may have already passed.

The market's overall transaction volume for the first half of the year remains historically low, reflecting a period of consolidation. However, experts believe the central bank's credit control policies are nearing their "ceiling," signaling a potential stabilization. Speculative buyers have largely exited the market, paving the way for a more demand-driven environment.

Starting in August, the "Qing'an 3.0" initiative will replace the previous "Qing'an 2.0" stimulus. This new policy introduces stricter criteria, including price caps for different regions and income eligibility requirements. It also phases out interest subsidies over time. The focus will shift to precisely supporting first-time buyers and families with children, particularly those seeking lower-priced, smaller units.

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The policy will shift from comprehensive stimulus to precise assistance.

Analysts compare "Qing'an 2.0" to a "bulldozer" that broadly stimulated the market, while "Qing'an 3.0" is likened to a "surgical knife." With ongoing credit controls and bank lending restrictions, the new policy is not expected to reignite a housing boom. Instead, it aims to foster a healthier market structure where genuine housing needs are the primary driver of activity.

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"Qing'an 2.0" was like a bulldozer pushing the housing market, while "Qing'an 3.0" is more like a surgical knife.