Local property market flashes ‘blue light’ for 3rd straight month

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Taipei skyline shines against the night sky in this file photo taken in 2017. According to real estate market magazine My Housing, the September housing index fell 0.8 points from a month earlier to 29.7, as Ghost Month on the lunar calendar partially fell in September. (NOWnews file photo)

TAIPEI (CNA) – Taiwan’s property market flashed a “blue” light in September, pointing to contraction, as potential home buyers stayed out of the market because of the Ghost Month taboo against buying property, according to real estate market magazine My Housing (住展雜誌).

In addition, property developers tended to put their new projects on hold during the Ghost Month period, the magazine said.

My Housing said the September housing index compiled by the periodical fell 0.8 points from a month earlier to 29.7, as Ghost Month on the lunar calendar partially fell in September, running from Aug. 22 to Sept. 19.

The magazine uses a five-color system to describe the local property market, with red indicating overheating, yellow-red showing fast growth, green representing stable growth, yellow-blue signaling sluggish growth and blue (when the index falls below 32) indicating contraction.

September was the third consecutive month the index fell below 32, according to the magazine. In Taiwan, many consumers tend to refrain from buying big ticket items such as homes and cars during Ghost Month to avoid bad luck.

Among the six factors in the housing index, two moved lower. The sub-indexes for the launch of pre-sale housing projects and transactions were at 6.53 and 4.69, respectively, in September, down from 6.90 and 5.16 points in August, the magazine said.

The sub-indexes for the four other factors — the launch of newly-built housing projects, property advertising, price negotiations and potential buyer visits — remained unchanged, the magazine added.

Ho Shih-chang (何世昌), a research manager at the magazine, said that only about 300 new housing units were launched in Taiwan in September, and most of them were small and medium-sized units in projects valued at less than NT$1 billion.

Ho said no property developers launched pre-sale housing projects until around Sept. 28, considered one of the prime times of the year to put new units on the market.

The aggregate value of new pre-sale housing projects rolled out at the end of September totaled nearly NT$35 billion, and most of the big projects topping NT$1 billion were located in Taipei, New Taipei and Taoyuan.

Ho said some companies are using more aggressive tactics to sell their units.

The developer of a new housing project in Shilin District in Taipei is offering free interior design services and free parking spaces to buyers, Ho said, and the developer of a project in Xindian District in New Taipei is offering a free sports car for each transaction. 

By Wei Shu and Frances Huang