Property: July Real Estate Transaction Volume Remains Flat Month-on-Month; High-Level Taiwan Stock Market Volatility Effect to Be Watched

Since July, the volatility of Taiwan's stock market at high levels has intensified. Chang Shih-tsung, General Manager of Chintrust Real Estate, stated on the 31st that July's nationwide real estate transaction volume was roughly flat compared to the previous month, indicating the market still has a certain level of support.

On one hand, Taiwan's stock market has remained in a high-level fluctuation pattern this month, prompting many investors to cash in profits and redirect funds toward the real estate market, which is seen as more value-preserving. On the other hand, first-time homebuyers are rushing to catch the final wave of the 'Youth Safety 2.0' housing loan program.

Hsu Chia-hsin, Executive Director of the住商 Real Estate Planning and Research Department, pointed out that the spillover effect from the stock market continues. What made July's property market particularly notable was the stronger performance in central and southern Taiwan. However, with the Taiwan stock market weakening, the possibility of a 'double hit' to both stocks and real estate remains to be seen, depending on the extent of the market correction.

Chang noted that the Ministry of Finance's announcement of 'Youth Safety 3.0' introducing new loan application restrictions—such as borrowers being under 50 years old and having an annual personal income not exceeding NT$2 million—has triggered a 'positioning psychology' among homebuyers. This has prompted some prospective buyers near the eligibility threshold to accelerate their decisions and implement their home purchase plans earlier, injecting strong momentum into July's market activity.

Chintrust Real Estate's internal statistics show that July's nationwide transaction volume decreased by 3.5% month-on-month but increased by approximately 11.9% year-on-year. Further analysis of the six major cities reveals: Taipei City saw a 6.7% month-on-month increase and a 9.8% year-on-year increase; New Taipei City decreased by 4.3% month-on-month but increased by 4.6% year-on-year; Taoyuan City decreased by 2.5% month-on-month and increased by 15.4% year-on-year; Taichung City increased by 9.4% month-on-month and 12% year-on-year; Tainan City increased by 6% month-on-month and 2.8% year-on-year; Kaohsiung City increased by 8.3% month-on-month and 13.3% year-on-year.

Looking ahead, Chang stated that August and September coincide with the traditional Ghost Month, during which some buyers may delay move-in schedules due to cultural customs. As a result, transaction volume in the third quarter may not see a significant increase. However, entering the fourth quarter, the market is expected to return to a normal trading rhythm. Besides the continued impact of 'Youth Safety 3.0', the approach of year-end elections may prompt central and local governments to propose policies related to transportation, industry, urban renewal, and public infrastructure, adding room for regional development speculation and helping to boost homebuyers' confidence.

Meanwhile, 住商 Real Estate's statistics from its franchise stores show that July's transaction volume increased by 6.7% compared to June and by 18.6% year-on-year. Hsu Chia-hsin noted that the stock market-driven spillover effect continues, with central and southern Taiwan showing particular strength this month, while Taipei and Taoyuan weakened. However, the stock market performed poorly in the latter half of the month, making the future outlook worth watching.

住商's statistics by city show year-on-year increases: Taipei +9.2%, New Taipei +17.5%, Taoyuan +10.4%, Taichung +25.7%, Tainan +31.4%, Kaohsiung +0.7%, and nationwide +18.6%. Month-on-month changes: Taipei -9.7%, New Taipei +3.9%, Taoyuan -5.6%, Taichung +16.1%, Tainan +31.6%, Kaohsiung +15.7%, nationwide +6.7%. Hsu believes that although the Central Bank of Taiwan has indicated it will not tighten further, the softening stock market raises concerns about a potential 'double hit' to both stocks and real estate, depending on the market correction.

Lai Chih-chang, Public Relations Assistant Manager of the Da-Jia Housing Planning and Research Department, believes that demand in prime urban areas ('egg yolk') is gradually warming up, indicating buyers have a clearer market stance. However, rising interest rates remain a major pressure on demand. In the medium to long term, with elections approaching, significant policy tightening is unlikely. Absent major shocks, demand may stabilize. However, the first half of 2023 saw lower property transfers than the previous year, and 2026 may face a battle to maintain 260,000 annual transactions.