Steep 30% Decline Predicted for Autumn Real Estate Transactions
In the bustling real estate market of Taiwan, a series of developments are unfolding that could impact first-time homebuyers.
The Financial Supervisory Commission has recently made a significant move by exempting first-home mortgages from the 30% cap on housing loans, a decision aimed at providing more financial flexibility to those entering the property market. However, this exemption may not be enough to counteract the potential challenges that first-home buyers might face.
According to a survey by FBS Internet Technology Co, a substantial number of first-home buyers might sell presale houses upon delivery if they fail to secure adequate mortgages. Worryingly, 1.7% of respondents have considered turning to underground lenders, which could potentially increase financial risks.
Moreover, nearly 11% of respondents have indicated they might default, and 7.5% have said they would resort to high-interest unsecured loans if all else fails. This highlights the pressing need for viable mortgage options for first-time buyers.
The survey also revealed that about 34% of respondents plan to approach multiple lenders, while 29.2% would turn to family or friends for financial support. This suggests a growing reliance on personal networks and multiple lenders as potential solutions to the mortgage conundrum.
In terms of large-scale real estate projects, the search results do not contain information about companies launching developments over NT$10 billion in Taiwan during the fall sales period of 2022. This could be a contributing factor to the shrinking prospects for this season compared to last year and the spring sales season, as fewer large-scale developments are underway.
However, not all news is bleak. Cities like New Taipei and Taoyuan still have projects totalling more than NT$10 billion. Notable developments include a major office development in Sinjhuang District by Highwealth Construction Corp and a large residential complex in Sanchong District by JSL Group in New Taipei City, and projects in Taoyuan's northern districts, such as Bade and Gueishan.
It's worth noting that banks have lowered the loan cap for mortgages to 70% since September last year, down from the assumed 85%. This reduction in loan availability could further complicate matters for first-time buyers.
As the real estate market continues to evolve, it remains to be seen how these developments will impact first-time buyers and the broader market in Taiwan. The exemption of first-home mortgages from anti-loan concentration rules is a step in the right direction, but more needs to be done to ensure that first-time buyers have access to affordable and secure mortgage options.
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