A real estate expert yesterday gave a pessimistic view of the market in the second half and on various credit control measures launched by the government.
Yen Pin-li, general manager of real estate advisor DTZ, made the remarks during an event yesterday morning.
He said the government has repeatedly launched credit control measures despite its promise not to do so. The central bank's latest effort was to require regular banks to reduce loans to buyers of luxury apartments and rescind a grace period in which borrowers only have to pay interest.
“With this measure, the cost of buying upscale apartments has became more expensive,” Yen said. “It is like raising the cost of buying NT$100 worth of products from the original NT$10 to NT$20 to now's NT$50, and you also have to pay interest as well as principal. The market will definitely take a hit.”
Developers are in no better position as the Financial Supervisory Commission has also announced to tighten construction loans. “This will force developers to take a wait-and-see attitude as they don't have enough money to launch construction projects.”
He said these measures will also shatter the confidence of luxury home owners who may sell some of their holdings in the second half. Yet response will be less than enthusiastic, leading to a possible decline in price, he said.
He added the only people who will have the upper hand in real estate are insurers who have got tons of money. “It is therefore my hope the property market will be ruled by insurers in the second half,” he said.
Source: http://www.chinapost.com.tw/international/americas/2012/06/28/345880/Expert-downbeat.htm
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