Tight housing market conditions persist in Northern Taiwan

The housing market in northern Taiwan is facing a challenging period, with several indicators pointing towards a slowdown. According to a business climate monitor, the market flashed "yellow-blue" last month, a level comparable to the COVID-19 pandemic. This is the fifth time the monitor has flashed this colour.

Transaction volumes, prospective buyer visits, and projects awaiting sale have all declined, and developers have become more cautious. The overall presale project volume has dropped by about NT$10 billion. The gauge, which tracks supply, transactions, and asking prices, stood at 38.2 last month.

In Taipei, asking and transaction prices are generally within a 10 percent range, but there are pockets of negotiation due to high housing prices. Premium projects in Taipei's Daan District contrast with more affordable options in Wanhua, Wenshan, and Neihu districts, generating bargaining room.

However, the number of housing projects for sale in northern Taiwan has increased, with 1,375 projects available, a rise of more than 40 from June. This increase in inventory, combined with sluggish sentiment in the presale and new housing markets, has created a "trapped" market, where many housing projects require years to clear inventory, even as new supply continues to arrive.

The slowdown in the market has been particularly noticeable in popular battlegrounds such as New Taipei City's Linkou District, Taoyuan's Guishan and Zhongli, and Hsinchu's Jhubei. Few project debuts are expected in these areas during the upcoming sales season.

Summer vacations, Ghost Month, and US tariffs are weighing on buyer sentiment, and many developers are postponing project launches until next year. As a result, it is unlikely that the upcoming Sept. 28 sales season would generate significant momentum.

Amid these conditions, only flagship projects in prime locations or newly launched presale projects in their "honeymoon period" are attracting visitors and sales. Price concessions remained largely stable, but the overall market remains cautious and uncertain.

Despite the challenges, it is worth noting that newly completed units rose by about 30 to more than 200 last month, offering limited support amid high prices and strict mortgage conditions. In other administrative regions, developers have largely maintained prices to avoid potential cascading effects, despite slower sales.

However, a search for the names of the ten largest developers active in the residential market in northern Taiwan yields no specific results. This lack of information may make it difficult for potential buyers to make informed decisions about the market.

As the market enters the second half of the year, headwinds have intensified, and it remains to be seen how developers and buyers will navigate these challenging conditions.