Among the top 10 administrative districts in Taiwan with the highest number of cancellations of pre-sale houses, Taoyuan City has the most 5 districts on the list, while Taichung and Kaohsiung also have 2 districts each on the list. (Provided by Yongqing Real Estate Group)
In the first half of 2024, the real estate market was booming, and the transaction volume in the pre-sale market was at its peak. However, due to the tightening of bank mortgage loans, the seventh wave of credit controls, and the wait-and-see market atmosphere, buying momentum and transaction volume declined sharply. Therefore, the number of cancellations of pre-sale houses has also attracted attention.
Yongqing Real Estate Group took stock of the top ten administrative districts in Taiwan with the highest cumulative number of cancellations of pre-sale houses, and found that the cancellations are more obvious in areas with rapid development of the housing market in recent years and a large number of projects, covering many redistricting areas, industrial clusters and core urban areas. Among them, Taoyuan City has a total of 5 districts on the list, and Taichung and Kaohsiung also have 2 districts each on the list.
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Data shows that Taoyuan City is the county and city where the pre-sale housing cancellation cases are concentrated this time, with five administrative districts including Yangmei, Zhongli, Taoyuan, Dayuan and Guanyin included in the list. Chen Jinping, deputy manager of the Yongqing Housing Research and Exhibition Center, pointed out that further observation of the common points among these five districts shows that most of them have large-scale development or rezoning themes, such as the Young Lion Industrial Zone in Yangmei District, the Qingpu Rezoning District in Zhongli District, the Jingguo Rezoning District in Taoyuan District, the Passenger Transport Park in Dayuan District, and the Caoluo Rezoning District in Guanyin District. As a result, many builders have been attracted to move in to promote the project. Many rezoning districts have accumulated a large number of pre-sale transactions during the hot housing market.
Administrative districts that had accumulated a large number of proposals due to redistricting at that time had a higher number of contract cancellations under the seventh wave of credit control and bank mortgage tightening.
Chen Jinping said that generally speaking, regional construction, transportation and living functions are important conditions for home purchase evaluation, but there is a time lag from the signing of the contract to the handover of a pre-sale house. After the seventh wave of credit control and the tightening of bank funds, it has affected the financial arrangements of some pre-sale house buyers, and they choose to terminate the contract due to changes in financial conditions, family planning or house purchase needs.
Looking at the top two in terms of the number of contract cancellations, Taichung City's Xitun District ranked first in Taiwan with 365 cancellations and the contract cancellation amount was NT$9.87 billion; Tainan City's Annan District ranked second with 329 cancellations. Chen Jinping analyzed that Xitun District has large-scale development zones such as Phase 7, Phase 12 and Shuinan Economic and Trade Park. In the past, it has been an important area for Taichung's real estate market promotion. Annan District has been rezoned by Jiufenzi, which has attracted builders to move in and promote projects in recent years. These two areas also accumulated a lot of pre-sale transactions when the housing market was hot. Therefore, when the market cooled down rapidly, many home buyers re-evaluated their home purchase plans, and the number of cancellations also increased.
Chen Jinping also said that the large number of contract cancellations does not necessarily mean that the regional housing market will be under greater selling pressure in the future. When the housing market was relatively active in the past few years, builders actively promoted projects, especially large-scale rezoning. Because of its advantages in land development and new project supply, it was most likely to become a hot area for project promotion. However, when the overall pre-sale market changes, since areas with a large volume of projects in the past naturally have relatively high cumulative transaction volumes, the number of cancellations is likely to be concentrated in these areas.
Chen Jinping suggested that before purchasing a pre-sale house, in addition to comparing regional development prospects and transaction prices, people should also make a complete estimate of the construction costs, housing payment and mortgage expenses, and reserve a capital buffer if the loan-to-value ratio is not as good as expected. At the same time, carefully read the house delivery, loan and termination clauses in the contract, and base the house purchase decision on actual living needs and affordability, so as to reduce the financial pressure during the house handover stage.
