Taiwan's real estate market has always been bullish for longer than short. This downturn is mainly caused by policies and banks tightening credit simultaneously.
After nearly two years of credit controls in the housing market, buying sentiment continues to be sluggish. As the central bank gradually relaxes restrictions on housing loans, will the market turn around? "Residential Weekly" president Lu Jingmin analyzed that Taiwan's housing market has always been bullish for longer than short. This downturn is mainly caused by the simultaneous tightening of credit policies and banks. The price of pre-sold houses in some areas has been revised by about 10% to 15%, but there is still some way to fully recover.
Lu Jingmin pointed out that SARS in 2003 and the financial tsunami in 2008 were the most obvious short-term impacts on Taiwan’s real estate market. After the outbreak of the new crown epidemic in 2020, the real estate market has surged driven by low interest rates, loose funds, and industrial park expansion. From the end of 2022 to June 2024, the central bank implemented 6 consecutive waves of selective credit controls, but it was still difficult to suppress housing prices. In September 2024, it launched a seventh wave of controls, which reduced the second-home mortgage ratio for natural persons to 50%, and the third-home and higher-priced residential properties to 30%, and controlled the total amount of bank real estate loans.
In March 2026, the central bank raised the loan percentage for second households to 60%, then relaxed it to 70% in September, and canceled the deadline for land purchase loans to start and close. However, this is only a phased relaxation. There is still no grace period for second-home mortgages, and other credit controls have not been fully lifted.
"This round of downturn makes people so frightened because the policy and banks tightened credit at the same time for two years." Lu Jingmin believes that long-term deleveraging has weakened market confidence, but the stagnant buying momentum in the past two years is mainly caused by the tightening of loan conditions. "Deleveraging is a means, suppressing speculation and housing price increases is the purpose." It is not appropriate to directly interpret policy tightening as a housing market collapse.
Judging from transaction data, the number of transferred buildings in Liudu in September 2026 was 17,945, a monthly increase of 14.1% and an annual increase of 11.6%; the total for the first nine months was a decrease of 0.1% compared with the same period last year, and the transaction volume was roughly the same as last year, showing that the market has begun to stabilize.
As for the reason why housing prices have not fallen significantly despite the long-term control of the housing market, Lu Jingmin analyzed that the key lies in the difference between the primary market and the secondary market. Pre-sale houses and newly completed houses are sold by builders or agents, and pricing and promotion are strategic. Second-hand houses are sold by individual owners, and those who are eager to spend money are more likely to lower prices. Therefore, the common urgent sales cases and expanded bargaining space in the market mostly come from the second-hand market.
"The pre-sale houses in the primary market have actually corrected, but the builders may not directly lower the asking price." He said that the builders may provide substantial discounts through decoration, air-conditioning, home appliances, delivery coupons, parking space conditions or payment methods. In some areas, the price of pre-sale houses has been revised by about 10% to 15%, roughly returning to the level between the third quarter of 2022 and the third quarter of 2024. In Taipei City, due to different supply and market conditions, generalizations cannot be made.
As for the cancellation of pre-sale houses, Lu Jingmin believes that it is mainly related to deleveraging by investors. When house prices no longer rise significantly, investors who rely on price differences and loan leverage to make profits may choose to terminate the contract due to shrinking returns and tight funds, or face difficulty in changing hands.
He also reminded that the termination of the contract for a pre-sale house and the "death" of being unable to pay the mortgage and being punished by the bank after handing over the house are problems at different stages. First-time homebuyers use grace periods or 40-year mortgages to reduce their monthly repayment burden and cannot be considered to be operating investment leverage. There is no direct causal relationship between the cancellation of pre-sale houses and the New Qing'an ethnic group and should not be confused.
