Taiwan’s real estate market sees El Nino effect

By John Liu, The China Post

TAIPEI, Taiwan — The El Nino phenomenon has impacted Taiwan’s real estate market this summer, as housing sales underperformed in Tamsui District and Keelung City, while sales picked up in Jiaosi, Yilan County, said Shih Shuan-chieh (施絢傑), the chief editor of My Housing magazine (住展雜誌). Tamsui District, a coastal district frequented by tourists in New Taipei City, tends to attract more buyers, many of whom are from out of town, in the summertime. With occasional monsoons bringing in strong gales to Tamsui during the winter, real estate developers a few years ago excavated hot springs in an effort to boost housing demand. Although the real estate business has been active in promoting riverside apartments in the Hongshulin area or properties in Danhai New Town, there has been a significant drop in sales, compared with sales records in previous years. All in all, statistics point to a worse-than-expected sales performance in the Tamsui area this summer. Government’s Policy to Suppress Housing Market Shih believes that government measures to suppress the rise of housing prices has contributed to the underperformance.

It is also reflects an oversupply in the housing market. Ever since the government made the decision to construct an MRT system to Tamsui, developers have rolled out a large quantity of apartments, contributing to a real estate boom that lasted into the winter months. Nevertheless, public infrastructure construction and local economic development have not caught up with the housing boom, and the current decline in sales is reflecting the oversupply, Shih said. A similar scenario has also occurred in Keelung City. Construction usually halts in the city during winter, which is usually accompanied by a lot of rain. As such, real estate sales usually pick up in summer. But this summer, Keelung has seen few property promotions, while some promotions scheduled to be introduced are postponed. Shih expects a high volume of housing promotions in the winter. Capital Moves to

the West Coast In Jiaosi, Yilan County, a tourism destination known for its hot springs, has experienced the opposite. The town’s real estate market usually picks up in the winter, but sales have gone up in the summer of this year. According to Shih, an apartment building featuring hot springs is now selling its units at a higher price, compared with the beginning of the year. But real estate investors were not deterred by higher prices, said Shih. As the government continues to put pressure on the housing market, capital flowing into the island’s west coast has moved to the east coast, where there are less restrictions, said Shih.