Taiwan's housing market undergoing moderate consolidation: CEPD

Taipei, Nov. 15, 2004 (CENS)--Taiwan's housing market has entered a stage of moderate consolidation as the confidence index for housing-unit price stood at 111 points in the third quarter of this year, the lowest level in the past four quarters, the Cabinet-level Council for Economic Planning and Development (CEPD) cited a survey outcome conducted by the non-profit Taiwan Institute for Real Estate Information as indicating.

Despite the slide of the confidence index, CEPD chairman Hu Sheng-cheng firmly believed the domestic real estate market would remain bullish until April next year when the preferential housing loan program is terminated. Although the Central Bank of China announced a hike of its key interest rates on Oct.1, explained Hu, few domestic financial institutions have followed suit, indicating there is still a large pool of idle funds on the domestic financial market.

The survey showed the ratio for housing-unit buyers targeting at investments dropped to 16.6% in the third quarter of this year from the preceding quarter's 17.3%. Kingdom Construction Corp. president Ma Yu-shan said housing-unit investors anticipated the local interest rate to drop further as the Central Bank of China has recently raised its key rates in the wake of U.S. Federal Reserve's upward adjustment of interest rates for three times.

Although the confidence index for housing-unit price in the third quarter was lower than the first quarter's 131 points and the second quarter's 120 points, it still stood at over 100 points, indicating the domestic housing market is in a moderate consolidation status.

CEPD said the average housing-unit price was 6.1 times higher than average annual family income in the third quarter of this year, quite the same as the second quarter. Housing-unit buyers spent 25.7% of their monthly income in housing units in the third quarter, more than the preceding quarter's 24.3%.

The survey also showed first-time house buyers were still the mainstay of the domestic housing market by accounting for 45.9% of the total housing buyers in the third quarter of this year, followed by 37.5% for the self-owned housing-unit owners seeking to replace old ones and 16.6% for pure investors.