Taiwan's Property Market Poised for Rebound in 2026

Taiwan's Property Market Poised for Rebound in 2026

Taiwan's real estate sector hit a cyclical low in 2025, with presale transactions dropping about 70 percent due to stringent credit controls, but experts predict a strong recovery next year.​

Factors Behind the Downturn

Tight credit policies implemented throughout the year curbed speculative buying and cooled overheated markets, leading to the sharp decline in presales. The Real Estate Alliance of the Republic of China (Taiwan) highlighted this slump during their year-end news conference, noting it as a natural market correction after years of rapid growth. Despite the challenges, transaction volumes in established properties held relatively steady, providing a buffer against broader collapse.​

Signs of Recovery Ahead

Analysts from the Real Estate Alliance forecast a rebound in 2026 as credit conditions ease and buyer confidence returns. Lower interest rates and pent-up demand from sidelined investors could drive presale activity higher, particularly in urban centers like Taipei. This upturn aligns with stabilizing economic indicators, including robust export growth fueled by AI demand, which bolsters overall investor sentiment.​

Implications for Investors

For buyers and developers, the projected rebound offers timely opportunities in residential and commercial segments. Monitoring policy shifts on credit and monitoring broader economic trends, such as semiconductor-driven growth, will be key to capitalizing on the shift. Taiwan's property market resilience underscores its role in the island's two-speed economy, balancing tech booms with traditional sectors.

Credit Controls and Market Slump

The Central Bank's selective credit restrictions, including mortgage caps and loan-to-value limits, curbed speculative buying and overheated demand, causing daily presale transactions to drop sharply—e.g., to 111.3 units in April from 507.6 the prior year. While presales suffered, transactions in established properties remained relatively stable, with signs of bottoming out in late 2025 as policy tweaks like exemptions for first-time buyers and extended grace periods for upgraders supported end-user demand. Commercial transactions also dipped, hitting a Q1 low of NT$18.2 billion (down 57 percent year-on-year), though retail and industrial deals provided some resilience.​

2026 Rebound Forecast

The Real Estate Alliance of the ROC (Taiwan) predicts a strong recovery in 2026 as credit eases, interest rates fall, and pent-up demand resurfaces, particularly in Taipei and other urban areas. This aligns with Taiwan's robust economy, fueled by AI-driven exports and a revised 2025 GDP growth forecast of 7.37 percent, creating a positive wealth effect for housing. The group urges government action: expanding first-home subsidies, relaxing second-home loan rules, and accelerating reforms to boost transactions.​

Investment Outlook

Banks hold buffers like 1.5 percent reserves on real estate loans, mitigating risks from softening demand, with mortgage growth expected to slow to 3-5 percent through 2026. Investors should watch policy shifts amid the "two-speed economy," where tech booms contrast traditional sectors, positioning residential and commercial rebounds as key opportunities.