After the central bank's seventh wave of selective credit controls, the amount of pre-sale housing cancellations in Taiwan reached 34.72 billion yuan, a new high for the same period in the past three years.

Since the central bank launched its seventh wave of selective credit controls in September 2024, the cancellation of pre-sale housing contracts across Taiwan has increased significantly. This is the intention (photo by reporter Xu Yiping)

[Reporter Xu Yiping/Report from Taipei] The waiting period for housing loan arrangements has lengthened, the real loan application interest rate has jumped by 2 to 3 yards, and the housing market outlook is still unclear. As a result, more and more pre-sale house buyers would rather terminate the contract early and lose money than wait until after the house is handed over. According to statistics compiled by real estate agents, in the first half of this year alone, the amount of pre-sale housing cancellations in Taiwan was as high as 34.72 billion yuan, and the number of cancellations was 2,189, both the highest in the same period in the past three years.

Ye Lingqi, business general manager of Yongqing Real Estate Group, pointed out that even though the current proportion of cancellations of pre-sale houses is still small, since the central bank introduced the seventh wave of selective credit controls in September 2024, the situation of cancellations of pre-sale houses in Taiwan has increased significantly.

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According to information released by the Ministry of Interior on the cancellation of real-price pre-sale houses compiled by Yongqing Real Estate Group, in the first half of 2024, the number of cancellations of pre-sale houses in Taiwan was less than 1,000, 906, and the cancellation amount was 14.11 billion yuan. However, with the central bank imposing the strictest credit control in September of that year, The number of cancellations of pre-sale houses across Taiwan has gradually increased. In the first half of this year, the number of cancellations of pre-sale houses in Taiwan has reached 2,189, and the cancellation amount has reached 34.72 billion yuan. Compared with the same period in 2024, the number and amount are 1.42 times and 1.46 times more respectively.

Real estate industry players pointed out that the cancellation of pre-sale houses in the central and southern parts of the country is more serious than that in the north. In particular, for a pre-sale project in Tainan, more than a hundred households canceled the contract before the house was handed over. Some buyers even offered a price lower than the actual price to sell the house, but no one was willing to take over. Moreover, some of the households who have terminated their contracts are actually buying a second home, or even multiple homes at once. Once they enter the house handover stage, they will immediately face the test of mortgage application.

Huang Shuwei, director of Colliers International Real Estate Owner Representative Services Department, said that the current mortgage arrangements still need time to digest, which has prompted pre-sale construction projects with low down payments previously launched to seize the market to be at the forefront of the wave of cancellations in recent years. In particular, low down payments and zero project payments actually weaken the pre-sale value. Regarding the ability and willingness of home buyers to perform their contracts, some people who have already purchased houses are worried that the conditions for applying for mortgage loans are not good, and they need to prepare more funds to complete the handover of the house. They would rather lose the low down payment and terminate the contract early, causing the originally expected "house handover wave" to turn into a "house exit wave" without warning.

Low down payment makes pre-sale houses the first to be canceled

He Shichang, CEO of Xin Chuan Real Estate Think Tank, said that the pre-sale market can reflect the housing market boom more quickly, especially when it falls into a correction, there will often be a wave of pre-sale cancellations and sell-offs. From 2015 to 2017, in Tamsui, Qingpu and other places, there were even tragic situations where all the projects were sold out, but the transaction ratio was still not high compared to the comparison.

Zeng Jingde, project manager of Xinyi Housing Real Estate Enterprise Research Office, said that if you buy before the seventh wave of restrictions and buy in a relatively remote area, you may face competition from surrounding cases in terms of price. In addition, the dominance of low-cost cases also makes a small number of buyers who no longer want to pay the project fee think about whether it is more cost-effective to continue paying or to exit.

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