MODERATE RATE HIKES: Taiwan has not been affected by inflation as badly as in most of the world, suggesting lower downside risks in the housing market, an analyst said
By Crystal Hsu / Staff reporter
Taiwan’s housing market is likely to be resilient next year, as inflation and interest rate hikes have been moderate, international property consultancy Knight Frank LLP said yesterday.
However, the market might not be spared from unexpected economic downturns, it added.
Global inflation is likely to hit 8 percent this year, the highest since 1996, Knight Frank said.
Photo: Hsu Yi-ping, Taipei Times
Central banks globally have tightened monetary policy to curb inflation.
This has led to lower demand for goods and services, and could slow GDP growth next year from 2.7 percent to 2.5 percent, it said.
The Asia-Pacific region would not be exempt from the slowdown, but Southeast Asia and India might fare better on the back of recovering domestic demand, the consultancy said.
Taiwan’s central bank raised its policy rate this year by 0.625 percentage points in four adjustments to 1.75 percent, which is relatively mild compared with the steep increase of 4.25 percentage points in the US, Knight Frank Taiwan general manager Cliff So (蘇銳強) said.
Taiwan’s moderate monetary tightening was due to benign inflation hovering around 3 percent this year, So said, adding that it could decrease to 2 percent next year.
This would suggest lower downside risks for the local housing market compared with the region and the rest of the world, So said.
Property transactions in Taiwan lost momentum in the second half of this year, and the chance of improvement is slim in light of heightening economic headwinds, he said.
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