Taipei, Feb. 10 (CNA) The local property market flashed a ‘blue light’ in January, pointing to contraction with an index gauging the state of the market falling from the previous month, according to a survey conducted by the real estate magazine My Housing.
The housing index for January dropped 0.4 points from a month earlier to 30.2, indicating the local property market flashed a blue light, with a score under 32 points. The listing of newly completed homes and the amount of property advertisement, two of the six factors in the index moved lower, the magazine said.
It was the second consecutive month the local property market has flashed a blue light, according to the magazine.
Under the system, red indicates overheating, yellow-red shows fast growth, green represents stable growth, yellow-blue signals sluggish growth, and blue indicates contraction.
Of the six factors that make up the index, the sub-index for the listing of newly completed residential housing fell from 4.44 in December to 3.04 in January, while the sub-index for the amount of property advertising also fell from 4.79 to 4.18, the survey showed.
Meanwhile, the sub-index for price negotiations and the number of viewings by potential buyers remained unchanged at 4.78 and 5.76, respectively, in January, the survey indicated.
Bucking the downturn of the overall index, the sub-index for the listing of pre-sale residential housing and home transactions moved higher to 7.26 and 5.16, respectively, in January, from 6.17 and 4.69 in December, according to the survey.
Ho Shih-chang (???), a research manager at the magazine, said the sub-index for home transactions was higher than expected, indicating that slow season effects in the month did not have too much impact on the local property market.
As for the fall in the supply of newly completed residential housing in January, that reflects the mentality of most property developers who are waiting until the end of the six-day Lunar New Year holiday, which will end on Feb. 20, when potential buyers return to the market, Ho said.
Ho said the decline in property advertising also resulted from a similar mentality among property developers.
While the number of viewings by potential buyers remained unchanged from a month earlier it rose about 30 percent from a year ago, Ho said, and the fact more potential buyers are willing to survey the market bodes well for future transactions.
However, Ho said he was cautious about the February index as the number of business days will be cut due to the Lunar New Year holiday, In addition, the Feb. 6 deadly earthquake in Hualien is also likely to affect market sentiment.
Source: Focus Taiwan