will there be a drop in housing prices?

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will there be a drop in housing prices?

Postby headhonchoII » 13 Aug 2012, 07:29

They are like half or third price of Taipei so there is a big difference in prices in the center and south of Taiwan. But then you still have a lot of luxury million dollar apartment being built aswell, for some reason most of the new places are pretty expensive, the second hand apartments can be bought for a more reasonable price.
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Re: will there be a drop in housing prices?

Postby SillyWilly » 13 Aug 2012, 16:21

http://www.chinapost.com.tw/taiwan/nati ... xperts.htm

According to this article interest rates are set to be slashed by the central bank in Taiwan with banks following suit.

The view has emerged after Taiwan's economic growth rate for this year has been slashed in forecasts by both the government and private think tanks, most of which are predicting that this year's growth will barely stand at 2 percent.

Meanwhile, other factors, including Taiwan's GDP contraction in the second quarter as well as China and South Korea's move to lower rates, have prompted experts to predict Taiwan's central bank will also do the same.


Rate reductions will probably set up the ultimate real estate bubble we've been talking about as speculators become even more complacent taking on new debt.
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Re: will there be a drop in housing prices?

Postby headhonchoII » 13 Aug 2012, 16:34

It's absolutely ridiculous, companies will borrow money when they think there is money to be made by investing. They are not investing in Taiwan because the rate is too high (it is already extremely low) or money is hard to get (soft loans from the government sponsored banks are easy to access for larger corporations).
This is just a prop for the property and stock market.
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Re: will there be a drop in housing prices?

Postby Rotalsnart » 13 Aug 2012, 18:39

Muzha Man wrote:
SillyWilly wrote:How do I know house prices will drop? Simple, take a drive through Linkou and see all the new, unfinished apartments - EVERYWHERE! Some of the newer finished buildings have had 20-30% occupancy the last 12 months and with new units coming online - those numbers are bound to drop even further. Some buildings have as few as 5 tenants. Linkou is starting to look like Vegas-style overbuilding. And we all know what happened when THAT bubble burst...ouch! Las Vegas real estate is still down over 50% from its peak. The Linkou property market is going to get clobbered..MRT..or no MRT. The overbuilding is really ridiculous especially considering new apartment building construction is starting soon and apparently interest rates are reversing (or at least starting to reverse).


I agree in the long run it has to. But Danshui and Sanxia are no different in terms of over-construction and they have not burst yet. It could still be many many years.


Danshui and Sanxia may be no different from Linkou in terms of over-construction, but they are vastly different in terms of intrinsic value.

Danshui, in particular, has great natural beauty, proximity to mountains, the river, and the ocean in the more scenic direction along the north coast, and historic charm. Certain current disadvantages there -- mainly poor road transportation access -- will actually work to the benefit of long-term investors as the roads leading there are improved and the light rail system is extended further along the coast in the future. So I think that a lot of property in Danshui and the vicinity further along the coast has room to rise further in value. That said, I would not currently be looking at units in highrises and would steer clear of the footprint of the growing concrete jungle there, looking instead for local values off the beaten path.

Linkou, on the other hand, has very little to recommend it, except surrounding commercial development such as in peripheral transportation industries, which are likely to increasingly detract from the quality of life even as they drive economic growth.
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Re: will there be a drop in housing prices?

Postby GuyInTaiwan » 22 Aug 2012, 22:58

I can't remember who said/wrote it, but the market can remain irrational far longer than one can remain solvent.

By all logic, the bubble should burst, and soon, but soon never seems to come until the day after you've run out of patience and bought (in at the high).
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Re: will there be a drop in housing prices?

Postby Incubus » 23 Aug 2012, 14:35

Maybe a drop has already begun. This article says home buyers should now counter offer at a 40% discount. So if you're looking at a property with an asking price of 13 million, you should offer 9 million. That's a lot of room for haggling.
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Re: will there be a drop in housing prices?

Postby Rotalsnart » 23 Aug 2012, 15:39

The key thing mentioned in that article is the new requirement (beginning from 1 August 2012) that real estate brokers publish the actual sales prices of all houses sold through them. This should greatly increase the overall transparency and rationality in Taiwan's housing market. I personally don't anticipate it leading to any significant across-the-board drop in housing prices in Taipei city though. It should help to shake things up and level things out a little, and will definitely work in favor of the small consumer and against greedy developers.

I think the 40% rule of thumb is definitely a good way for any prospective buyer to test the water on a particular property. (Though I think 20 to 30% off asking price is probably a more realistic goal in typical individual negotiations.)
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Re: will there be a drop in housing prices?

Postby SillyWilly » 19 Sep 2012, 01:13

www.globalpropertyguide.com/Asia/Taiwan/Price-History

Taiwan now has 1.56m + unoccupied housing units. Of which half is possibly in Linkou... :) :roflmao:
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Re: will there be a drop in housing prices?

Postby SillyWilly » 19 Sep 2012, 09:36

SillyWilly wrote:http://www.globalpropertyguide.com/Asia/Taiwan/Price-History

Taiwan now has 1.56m + unoccupied housing units. Of which half is possibly in Linkou... :) :roflmao:


Image

Taiwan's interest rates are currently at historic lows. What's going to happen when interest rates rise from these historic lows? Interest rates can single-handedly derail this real estate market.

Apparently 50% of real estate transactions are done by speculators currently. That's an amazing number and doesn't bode well for the future, especially since most mortgages in Taiwan are variable rate mortgages with 25-year maturities. THAT'S A HELL OF AN EXPOSURE TO INTEREST RATE RISK!

I also liked the statistic that Taipei residential real estate has increased by 50% from 2006 to 2009, but income only rose by 2%. That's 50% vs 2%!!! Almost 4 years ago. That statistic must look more like 80% price increase vs 3% rise in income currently. One word to describe this: UNSUSTAINABLE. Collapse is imminent.


tick-tock, tick-tock...BOOM! :popcorn:
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Re: will there be a drop in housing prices?

Postby creztor » 19 Sep 2012, 11:20

SillyWilly, I couldn't agree more, but they always find someway of making the ponzi work a little longer. I wouldn't use the word imminent, but instead it is clear that at some point the ponzi will collapse in on itself. Until that happens, much like stocks and the stock market, there is money to be made if you know what you are doing. Sadly, I don't and never will. So I will just sit back and wait for the shit to hit the fan.
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