Citing Sinyi Realty, the report said the number of customers who have asked brokers to show them houses has recently dropped by some 30 percent. Based on a 100-point scale registered Dec. 28 last year, the score for early March had dwindled to 104 points from its peak of 147 points in mid-January, it said.

Due to the weaker demand, purchases of houses valued at over NT$15 million (US$472,000) in Taipei City slid to 35 percent of the total as of March 9, down from 40.7 percent around the Chinese New Year holiday, according to the report.

More customers -- both those looking for their own homes or for investment properties -- have adopted a wait-and-see attitude, it said.

In response to planned measures by the government to ease soaring housing prices, the local business and industrial communities have voiced concern over a possible negative impact on the real estate and property market.

Both Chen Wu-hsiung, chairman of the Chinese National Federation of Industries, and Chang Pen-tsao, chairman of the ROC General Chamber of Commerce, said it is right for the government to address the problem and to help channel speculative funds into other sectors.

However, Chen cautioned the government against an overreaction, on the grounds that the real estate and property market is the locomotive of the economy. He added that he favors providing preferential loans to first-time home buyers.

For his part, Chang contended that the government must urgently seek ways to introduce idle money into other channels.

Chang Chin-oh, professor of the Department of Land Economics at National Chengchi University, advised the public Thursday not to buy their own homes at present, as house prices have surged.

Although the government has announced plans to curb the soaring house prices, Chang warned that this will give the public the false belief that now is a good time to purchase a home. "This will in turn help investors to get out of the market, making people eager to own their own homes the victim of the speculation," he pointed out.

Chang predicted that housing prices will fall in the future, but not at present. "A correction might occur in six months or one year, and potential home buyers should observe the market for at least a year before deciding to make a purchase," he said.

Consumers must stay cool-headed and use their rationale when making judgments, he said. "Do not believe that house prices will continue going up, and do not panic into believing that you will never be able to buy a home," he went on.

Chuan Meng-han, an associate professor with the Department of Industrial Economics of Tamkang University, suggested that the government should "deal with a few investors, " as this would be "the most effective way to ease the housing fever." Chuang suggested that the government should demand that speculators provide documents to prove the origin of their capital before being allowed to purchase a house. "This will definitely scare away investors seeking to profit from the property market," he said.

"As long as the government is resolved to clamp down on such speculation by showing its teeth to the public, no speculator will dare to take the risk," he said.

(By I.F. Lin and Flor Wang)