Taiwan Housing Zhou Heming looks at the four major variables in the housing market. The second quarter will change and the second half of the year will be conservative.

The real estate market was bustling in the first quarter, as investors started to dance at the sound of “accumulation”. Will the real estate market boom decline in the second half of the year? According to Taiwan Housing’s latest release today (23rd), the housing market boom signal for the second quarter has changed! The red light of overheating in the first quarter turned to amber, mainly due to the impact of four major variables including the new cabinet and the housing tax 2.0. It is estimated that the green light of “stable” may return to “stable” in the second half of the year, and the view is more conservative than that of the first half.

Further reading: What is the price difference between new houses and old houses in Taipei City?The difference between Shilin and Shihlin is 40%.

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 (23rd). The sentiment index score for the second quarter of 2024 has changed from the red light of overheating in Q1 to a yellow-red light. , the indicator score dropped slightly to 50.9; it is predicted that the indicator score in the third and fourth quarters will slow down quarter by quarter, returning to the green light representing a stable economy.

Zhou Heming cited four major variables to predict that the housing market will be conservative in the second half of the year.

Zhou Heming, chief vice president of the Taiwan Housing Group, said that the abundant hot money in the market and investors’ mentality of “acquisition” caused the housing market to become overheated in Q1 this year. After the central bank raised interest rates, Q2 cooled down slightly, because there are still four major variables in the market. . The first is “Hoarding Tax 2.0 is on the way”; second, “the stock market is shaking at highs”; third, “the new cabinet is on the road to adjust” and fourth, “the U.S. interest rate policy is unclear” and other factors. Therefore, the economic forecast for the second half of the year is more conservative than that of the first half.

However, because the domestic economic outlook is benign and the new Qing’an policy continues to support the market structure of “cooling investment and increasing owner-occupancy”, the overall development still maintains a rational and stable green light.

Further reading: After 8 years, the Taoyuan Cultural District reappears as the king of 120 million yuan mansions

Interest rate hikes have put the brakes on the boom, setting the stage for the next wave of expansion.

Comparing Taiwan’s housing market sentiment signals with the central bank’s interest rate changes, it can be found that in the early stages of the three waves of interest rate hike cycles in 2004~2008, 2010~2011 and 2022~2024, the market’s expectations and fears stemmed from capital tightening and cost increases, and the housing market boom all declined from high to high. point is revised downward; but after interest rates stabilize, the economy will also move towards a period of mild expansion with a gradual increase.

Zhou Heming said that the main purpose of raising interest rates is to recover funds to suppress the economy when the market is overheated, and it seems to be quite effective so far. However, raising interest rates is closely related to inflation. Under the expectation of currency depreciation, medium and long-term funds will still be transferred in. The housing market is at a standstill. It is expected that at the critical moment when interest rates turn to interest rate cuts in the future, in the face of economic slowdown, rigid purchase of houses will be more rational and prudent, while anti-inflation products that can stabilize long-term income will be more popular. Therefore, when the economy rebounds, At this time, the public can return to examine their needs and capabilities and plan for the next wave of expansion.

• Yahoo Finance special correspondent Ye Yiru: With more than 20 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 business 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.