The commercial property market in the greater Taipei area is expected to see a boost after the Financial Supervisory Commission relaxes restrictions on property investments by domestic insurance companies, realtors said yesterday.
But an academic yesterday said that the planned capital deregulation, which could take effect as early as this month, along with recent pro-China policies, would increase property prices, which will end up working against local home buyers.
“Along with weakened economic fundamentals, the property market was supposed to have experienced downward corrections. These, however, were interrupted by this favorable news,” Chuang Meng-han (莊孟翰), an associate professor of economics at Tamkang University, said yesterday by telephone.
Property prices in the eastern district of Taipei, such as the upscale Xinyi District (信義) and Neihu District (內湖), have irrationally more than doubled in a short time, he said, adding that no property prices should have gone up by more than 30 percent in less than three years.
Chuang said that the nation’s economic fundamentals, per capita GDP and household incomes haven’t grown enough to support any property boom or price hikes.
He said that Taiwan should learn lessons from the burst of capital-driven property bubbles in Japan in the early 1990s and in Hong Kong after 2000 when equity and property prices greatly fluctuated.
Realtors welcomed the policies to prop up the market.
Lee Jain-ming (李健銘), a researcher at Sinyi Real Estate Inc (信義房屋), the nation’s largest housing agent, said yesterday domestic insurers would definitely inject more capital into the commercial property market, where supplies are scare, after the cap on investment is lifted.
“Prices are sure to go up after demand rises on limited supply,” Lee said by telephone yesterday.
Lee expects insurers to eye grade-A investment destinations mostly in Taipei City’s business districts, such as Xinyi, Dunhua S Rd and Nanjing E Rd, as well as grade-B industrial office buildings in Neihu District.
For example, Shin Kong Life Insurance Co (新光人壽) has long expressed interest in acquiring another office building after acquiring nine different properties in Neihu.
Taichung and Kaohsiung cities may get a slice of the pie, once both are upgraded to municipalities, or if the southern city’s commerce and trade zones successfully attract clusters of businesses, Lee said.
Roy Ku (古健輝), manager of appraisal at Colliers International (Taiwan) Ltd, was also optimistic.
He said that insurers were competing for investments, which generate a better reward than time deposits or government bonds, in a low interest rate environment, and properties provide the best alternative.
As of May, the insurance sector had NT$8.8 trillion (US$266 million) in working capital. In accordance with the new regulation, insurers will be allowed to invest up to 3 percent of that in properties.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS