Taipei home prices jumped to a record amid a recovery in demand in anticipation of accelerating inflation as the government eased curbs on fuel price increases and raised electricity prices.
The average price of new homes in Taipei rose to a record NT$800,000 ($27,117) per ping, or the equivalent of 36 square feet in March, compared with an average of NT$550,000 a year earlier, said Stanley Su, chief analyst at Sinyi Realty Co., Taiwan’s biggest listed real estate broker.
“The low-interest rate environment coupled with expectations of higher inflation have pushed some people into buying high-end properties as they see these assets as more value-sustaining,” Su said in an interview in Taipei today.
The price for a luxury home, usually of over 100 pings, in the downtown Taipei costs about NT$2 million per ping, Su said.
President Ma Ying-jeou pledged during the election campaign to fight real-estate speculation that led housing prices in the capital Taipei to more than double since 2000, and reach a record high in September. Taiwan last year introduced a 15 percent tax on homes sold within a year of purchase, and a 10 percent levy on some sold within two years.
The government this month allowed fuel prices to rise and electricity prices are set to increase from May 15.
Wai Ho Leong and Joey Chew, economists at Barclays Capital in Singapore, raised the forecast for Taiwan consumer price index this year to 2 percent from 1.5 percent after the fuel and electricity increases, according to a report yesterday. The statistics bureau last month said inflation this year may be 1.46 percent.
The island’s central bank in March held the benchmark rate at 1.875 percent, as rising oil prices increase pressure for monetary tightening. The central bank this week proposed monitoring fluctuating housing prices as part of an inflation watch, at a weekly meeting of a price stability taskforce, headed by vice premier Jiang Yi-hua.