Reporter Chen Weifan/Reporting from Taipei
▲Zhang Dingxuan said that judging from the international financial situation, housing prices are very likely to usher in a new wave of growth next year. (Picture/Photography by reporter Chen Weifan)
After the U.S. Federal Reserve (Fed) announces the possibility of interest rate cuts, what impact will it have on Taiwan’s housing market? Financial scholar and Shellless Snail Professor Zhang Dingxuan said in an interview with “Sanli News Network”, “According to the current international situation, there is a high chance that hot money will flow back to Taiwan. The next step will be to flow into the stock exchange market and the real estate market. It is estimated that housing prices will be very likely to increase next year.” Ushering in a new wave of gains!”
U.S. Federal Reserve (Fed) Chairman Jerome Powell expressed the possibility of an interest rate cut on December 13. He said, “Inflation has fallen much faster than expected. Policymakers have once again paused raising interest rates and turned their attention to cutting interest rates, predicting a new trend.” Interest rates will be cut by 3 percentage points (0.75 percentage points) this year.”
Zhang Dingxuan said that Taiwan’s real estate market is currently in a situation where pre-sale houses are on the cold side and second-hand houses are hot after the government’s “left-hand push for housing and right-hand push for profit”. Overall, housing prices that should have had the opportunity to correct have begun to stabilize. There are signs of a slight increase, and one of the key factors affecting housing prices is “rate increases and cuts.” After the Fed releases interest rate cuts, Taiwan’s housing prices may usher in another wave of growth.
He explained, “After the Fed released the news of interest rate cuts, the Taiwan dollar immediately ushered in a wave of celebrations. The exchange rate with the US dollar has risen to more than 31 yuan, indicating that hot money has begun to return to Taiwan. Given Taiwan’s current situation, the chances of raising or lowering interest rates are not high. After all, in order to make GDP look better, the central bank has previously raised interest rates at a slow pace and used policy controls to suppress “digital inflation.” But at this stage, it must pay a price. We are neither able to lower interest rates, nor are we willing to raise interest rates in terms of policy. In the end, it is Ordinary people have suffered the bitter consequences of soaring prices.”
Regarding the policy regulation adopted by the government in order to make GDP look good, Zhang Dingxuan explained, “The main ones are water, electricity, and oil. The government currently suppresses them with subsidies. For example, the central government recently increased the capital of Taipower by 700 billion, and the three necessities of people’s livelihood are under the control of the government. , the numerical value is naturally good-looking, but if you look at lunch boxes, bread and other foods that are not controlled by the government, you will know that they are all so expensive! A bento can easily exceed 100 yuan, so how can it only increase by 2%? “
He further pointed out that as foreign interest rates are cut and interest rates in Taiwan are suspended, and hot money returns, it will flow into Taiwan’s stock, foreign exchange and real estate markets. There is a high probability that it will return to the situation where hot money was everywhere in the previous 1 to 2 years, and housing prices will inevitably It also ushered in a wave of gains.
However, he also reminded that whether such a trend is clear or rapid depends on whether the Fed actually cuts interest rates. After all, at this stage, the U.S. central bank is only talking and has not yet taken any real action.
Finally, Zhang Dingxuan warned that for Taiwanese, if “house prices and commodity prices” continue to rise, people who are homeless and have no investment and financial management habits will have less and less money in their hands, and young people with the weakest financial resources will People are bound to bear the brunt. It is recommended that the government, in addition to carrying out policy controls to make GDP look good, should also think about the future of Taiwan’s young people.
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2023-12-25 07:58:00
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