New Qing’an has made the real estate market lively. Will the real estate market boom decline in the second half of the year? 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. The sentiment indicator score for the second quarter of 2024 has changed from the red light of overheating in the first quarter to a yellow-red light, and the third quarter is forecast. The indicator scores for the first quarter and the fourth quarter will slow down quarter by quarter and return to the “green light” indicating stable economic conditions.
Zhou Heming, chief vice president of the Taiwan Housing Group, said that there was abundant hot money in the market, and investors jumped on the idea of ”hoarding”, which caused the housing market to be overheated in the first quarter of this year. After the central bank raised interest rates, it cooled down slightly in the second quarter, because the market still has ” “Hoarding tax 2.0 is on the way”, “the stock market is fluctuating at highs”, “the new cabinet is on the way” and “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, and the new Qing’an policy continues to support “investment” The market structure of “cooling down, heating up for self-occupancy” has given the green light to rationality.
Comparing Taiwan’s housing market sentiment signals with central bank interest rate changes, we can find that in the early stages of the three waves of interest rate hike cycles in 2004~2008, 2010~2011 and 2022~2024, the market came from expectations and fears of capital tightening and cost increases, and the housing market boom all declined from highs. However, when 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. It seems to be quite effective so far. However, raising interest rates is closely related to inflation. Due to the psychological impact of the expected 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 will turn from interest rate increases to cuts, in the face of an economic slowdown, rigid purchases of houses will become more rational and prudent, and anti-inflation products that can provide long-term stable 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.
Wu Daren, CEO of the Taiwan Economic Development Research Center at National Central University, said that Taiwan’s housing market boom signal is both “comprehensive” and “futuristic.” Since the real estate boom is affected by many factors, it can only be measured based on volume or price. It is easy to fall into the blind spot of “missing the forest for the trees”, and it is difficult to reflect the overall market reality.
Wu Daren pointed out that the Taiwan Housing Group cooperated with the Taiwan Economic Development Research Center of National Central University to select 17 representative variables based on the four major aspects of the overall environment, production, transaction and economic confidence to create “Taiwan Housing Market Sentiment” “Light Signal”, through the most comprehensive data analysis, evaluates the actual market momentum and prosperity, and predicts future housing market trends. It is the only leading indicator that can predict the subsequent development of the housing market.
The period of Taiwan’s housing market climate signal data is from January 2002 to December 2023. With reference to the processing method of the National Development Council’s Prosperity Countermeasures Signal Indicator Project, the original data are seasonally adjusted, long-term trends removed and standardized, and then analyzed through Through the principal component analysis method, we calculated the prosperity index and predicted the Taiwan housing market sentiment index and five light signals after the fourth quarter of 2023. The light signals corresponding to the scores are the red light of overheating, the yellow and red light of hotness, the stable green light, Sluggish yellow and blue lights, and lackluster blue lights.
(Source of the first picture: Taiwan House)
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