The central bank meeting may affect the housing market's loan restriction policy. Experts expect that housing prices will first loosen and then increase in transaction volume.

The price of large-scale construction projects is relatively difficult to fall, and it is easy to increase the overall average unit price. Some construction projects use gifts, payment terms, etc. instead of direct price reductions. (Picture/Information photo)

The central bank held a meeting of directors and supervisors today (17th). Real estate market expert Li Tongrong said that there are two possible outcomes of this meeting. If the central bank raises interest rates, it may also slightly loosen the housing market's loan restriction policy to avoid an impact on the industry. If the central bank does not raise interest rates, the relaxation of the loan restriction policy may be extended to the fourth quarter. The main reason is that the current housing market is showing a situation of "volume shrinking, but prices have not relaxed."

Li Tongrong analyzed that there is currently no significant decline in the housing market, or the decline is relatively limited. First, Taiwan's economic fundamentals are still strong, coupled with high construction costs, and the deep financial strength of large builders, which limits price downward revisions. Second, the market shows clear strengths and weaknesses, which also slows down the overall housing price decline.

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He pointed out that there are also data blind spots in the existing housing market. Although there is a significant increase in the number of remaining units, the proportion of new housing transactions has increased, and the price of new housing is usually higher, thus driving up the average unit price in the market. Some areas may show "inflated" phenomena, and actual market price changes may not be fully reflected in the average unit price.

There are also data blind spots in the pre-sale market. Li Tongrong said that the prices of large-scale construction projects are relatively difficult to fall, and it is easy to increase the overall average unit price. Some construction projects use gifts, payment terms, etc. instead of direct price reductions. Therefore, although the transaction volume in the market has shrunk, the price data may still remain high, resulting in a situation of "shrinking volume and inflated prices."

Li Tongrong believes that if the central bank does not see these blind spots in housing price data and still bases its judgment on the lack of significant price decline, the loan restriction policy may be suspended and the housing market will continue to be in a deadlock.

He said that the current overall trend of the real estate market can be described as "a decline in price". Prices have not been significantly corrected, but the transaction volume has been significantly reduced. The market has digested the price pressure over time. This is where the current real estate market performance is different from the past simple "price decline and volume contraction".

Looking forward to the fourth quarter, Li Tongrong believes that there are three key points that can be observed in real estate market transactions, including whether there is a retrograde movement in the stock market and real estate market and capital rotation, whether policies are relaxed and interest rate trends, as well as changes in housing prices and transaction volume. He expects that prices may first loosen and transaction volume will increase, and the housing market will not stop falling until the first half of next year.