The lights have changed!Taiwan’s housing market boom signal turns green in third quarter and will remain until next year

The lights have changed! The Taiwan Housing Group and the Taiwan Economic Research and Development Center of National Central University released the latest “Taiwan Housing Market Sentiment Signal” and housing market sentiment forecast today (6). The housing market in the third quarter turned from the “yellow-blue light” in the second quarter to a “green light”, which means that the housing market stabilized in the third quarter. It is predicted that the green light will remain in the fourth quarter to the first half of next year. Zhou Heming, chief vice president of Taiwan Housing Group, said that the housing market has “two different situations” in the first and second half of the year. The general trend will be determined before the end of the year. It is expected that the whole year will end with “a slight contraction in volume and a slow increase in prices.”

Further reading: Can the empty house tax save Taiwan’s high housing prices?He Shichang: Britain and Japan will rise even more fiercely

The latest research results released by the Taiwan Housing Group today show that in the second quarter, Taiwan’s housing market sentiment light was a yellow-blue light, with a prosperity index score of 39.74, which means that the housing market has gradually emerged from the downturn. In the third quarter, the prosperity index score was 46.62, and the light turned green, which means The housing market stabilized in the third quarter; the fourth quarter prosperity index score is forecast to be 46.52, and the first and second quarter prosperity index scores of 2024 are 45.81 and 44.1 respectively. Although there are still fluctuations, they are all in the green light area of ​​stable prosperity. It shows that under the pattern of “strong demand to support the market and moderate domestic demand”, the development of the housing market has maintained a steady pace.

Zhou Heming said that the real estate market in the first and second half of this year can be said to be two completely different situations. In the first half of the year, the market was affected by the policy of cracking down on real estate speculation, and the transaction volume shrank sharply. However, in Q3, the new Qing’an premium loan policy came into effect, which gave the real estate market a first boost. The wave of home purchases also caused the transaction volume to turn from contraction to increase in the second half of the year, and prices also received support. Therefore, the housing market for the whole year is expected to end with a slight contraction in volume and a slow increase in prices.

The current global economy is at a turning point between interest rate hikes and interest rate cuts. Zhou Heming believes that, coupled with geopolitics, domestic elections and other variables, governments around the world are actively responding to political and economic developments and adjusting policies to reduce the impact. By the end of the year, although the general trend of Taiwan’s housing market will be stable, it will Price and volume still need to be dynamically observed, and property purchase should return to the motivation and demand for buying a house. And each demand represents the length of time holding, including long-term holding plans such as self-occupation, self-use, long-term property purchase, and business development. Based on past historical experience, housing prices have risen more or less. In the period of self-occupation and business operation, In the process, the value of assets is slowly increasing.

Wu Daren, CEO of the Taiwan Economic Development Research Center at National Central University, said that single indicators such as housing price index or transaction volume are often used as the basis for judging the real estate boom, but a single indicator cannot reflect the overall market situation and may lead to misjudgment of the situation. In view of this, the Taiwan Housing Group has collaborated with the Taiwan Economic Development Research Center of National Central University to create the only leading housing market indicator in the country, the “Taiwan Housing Market Sentiment Signal”, in the hope of more comprehensively assessing market momentum and prosperity, and predicting future housing market trends.

The Taiwan Housing Market Sentiment Signal screened out a total of 17 representative variables based on the four major aspects of the overall environment, production, transactions and economic confidence. The data period is from January 2002 to June 2023, with reference to the National Development Council’s Sentiment The processing method of the indicator components of the countermeasure signal is to seasonally adjust the original data, remove the long-term trend and standardize the adjustment, and then use the principal component analysis method to calculate the prosperity index, and predict the 2023 period at the 95% confidence level. Taiwan’s housing market sentiment indicators and five light signals after three quarters. The corresponding light signals are (52.99~100) red light for overheating, yellow and red light for improvement (46.91~52.99), and green light for stability (42.25~46.91) , yellow and blue lights that turn bad (36.56~42.25), and blue lights that are depressed (0~36.56).

• Yahoo Finance special correspondent Ye Yiru: 22 years of experience in mainstream financial media. From the Web1.0 bubble in 2000 to the Meta Yuanverse Web3.0, he has witnessed the rise and fall of Taiwan’s large and small enterprise groups and has experienced five international financial crises. We believe that finance is life and is everywhere. No matter how difficult financial knowledge is, we should explain it in a simple way. Everyone, young and old, should manage money. If you don’t manage money, money will not care about you.