Sluggish Real Estate Market Persists in Northern Taiwan

In the heart of Taipei's Zhongzheng District, only one project boasts potential sales exceeding NT$10 billion, a stark contrast to the broader housing market landscape. The market is currently grappling with declining transaction volumes, buyer visits, and projects awaiting sale, as summer vacations, Ghost Month, and US tariffs weigh heavily on buyer sentiment.

The business climate monitor for northern Taiwan's housing market has flashed "yellow-blue" five times recently, reflecting a cautious outlook and continuing challenges in the sector. This signal comes as a result of softening property market conditions, economic and market uncertainties, and a lack of strong demand recovery.

Banks in Taiwan have reported resilient loan quality but acknowledged a softening property market environment, indicating that housing demand remains subdued and market momentum is low. The repeated "yellow-blue" warnings typically denote moderate caution from business climate monitors, suggesting ongoing economic or sectoral uncertainties affecting buyer confidence and investment decisions.

According to general real estate surveys, demand in related markets shows some resilience but is not robust enough to reverse the weakness fully, implying persistent structural or cyclical pressures impacting housing. While specific recent data on northern Taiwan housing are limited, the known context of a softening property market and cautious lending environment logically point to these as primary contributors.

In Taipei, the market landscape is diverse, with premium projects in the Daan District contrasting with more affordable options in Wanhua, Wenshan, and Neihu districts. This diversity offers bargaining room for buyers. However, headwinds have intensified as the market entered the second half of the year, with price concessions remaining largely stable and many developers postponing project launches until next year.

The upcoming Sept. 28 sales season is unlikely to generate significant momentum due to the postponement of project launches. Few project debuts are expected in popular battlegrounds like New Taipei City's Linkou District, Taoyuan's Guishan and Zhongli, and Hsinchu's Jhubei. In other administrative regions, developers have largely maintained prices to avoid potential cascading effects.

New Taipei City and Taoyuan have seen the steepest gains in the number of projects for sale, with 1,375 projects available, up more than 40 from June. Developers have grown more cautious, with overall presale project volume dropping by about NT$10 billion. The number of newly completed units has modestly increased, offering limited support amid high prices and strict mortgage conditions.

Interestingly, asking and transaction prices in northern Taiwan, except for Taipei, remain closely aligned, generally within a 10 percent range. Many projects in northern Taiwan are taking years to clear inventory, even as new supply continues to arrive. The gauge, which tracks supply, transactions, and asking prices, stood at 38.2, a level comparable to the COVID-19 pandemic.

In sum, the repeated "yellow-blue" status highlights that while the housing market has not entered crisis mode, it is still marked by uncertainty and below-normal vitality due to ongoing softness in demand and economic factors restraining growth.