Taiwan Housing Market Sees Cooling Pessimism, High Inventory

The prevailing sentiment that housing prices in Taiwan will decline has softened, according to the latest third-quarter online member survey by a major real estate agency. The proportion of potential buyers anticipating a price drop fell by 6 percentage points to approximately 36% in the third quarter, while those expecting prices to rise remained steady at 27%.

Chen Szu-chieh, a management department executive at Yung Ching Realty, attributed this shift to Taiwan's robust economic momentum and the stock market's consistent performance, which has generated a wealth effect. This has led to a moderation in expectations for a substantial decrease in housing prices. However, Chen noted that the percentage of those expecting prices to fall still exceeds those anticipating an increase.

The market for pre-sale homes continues to show sluggish sales, with actual transaction data for the first four months of the year indicating a nearly 30% decrease in volume compared to the same period last year. Paradoxically, pre-sale home prices have continued to rise, creating a market characterized by "shrinking volume and rising prices."

This slowdown in pre-sale market activity has contributed to a growing inventory of unsold new homes. Yung Ching Real Estate Group reports that the total number of unsold pre-sale homes across Taiwan has reached 137,000 units. A significant majority, 115,000 units or 84%, are concentrated in the six special municipalities and Hsinchu County and City.

Yeh Ling-chi, general manager of Yung Ching Real Estate Group, projected that the total number of property transfers nationwide for the year will range between 251,000 and 264,000 units. This represents a potential year-on-year decrease of 3% or an increase of 2%. Yeh also highlighted regional disparities in inventory absorption, with Kaohsiung City potentially requiring 8.3 years to sell its current pre-sale inventory, followed by Tainan City at 6 years, while northern cities like Taipei could sell out in about 1.5 years.