TAIPEI: Housing transaction value in Taiwan fell sharply last year, down more than 20 percent from the previous year, at a time when the local economy showed signs of slowing down, according to market statistics.
Last year, the transaction value of homes, shops and offices totaled NT$2.92 trillion (US$87 billion), down almost NT$1 trillion, or 24 percent, from a year earlier, the statistics showed.
In terms of transaction volume, the data indicated that residential and commercial property for last year fell 8 percent from a year earlier to 294,000 units, which was also evidence of weakness in the domestic property market.
Analysts said that a lack of buying interest in the local property market also reflected concerns over a heavier tax burden under a capital gains tax reform act passed by the government, which aims to rein in skyrocketing home prices across the nation.
Having taken effect on Jan. 1, the reformed tax law has imposed a capital gains tax of up to 45 percent on people who sell their commercial or residential property within a certain period of time from the date of purchase.
Before the implementation of the law, many property investors had taken to the sidelines.
Among the six major municipalities in Taiwan, Taichung, Taoyuan and New Taipei City recorded the steepest decline in property transaction value last year, the statistics showed.
According to the data, transaction value dove 34.1 percent in the Taichung property market, plunged 29.2 percent in Taoyuan and shed 28.3 percent in New Taipei City.
After a slowdown last year, analysts said that the property market is expected to remain weak this year, since there have been few signs that the global economy will make a comeback any time soon, and market sentiment remains haunted by the tax reform scheme.
Lin Tai-lung , a manager of Yung Ching Realty Group, is one of the analysts who have been downbeat about the property market. Lin said that with property prices expected to fall about 10 percent this year, transaction value could trend even lower in the year.
Lin said it is unlikely that housing transaction volume would top 300,000 units this year.
