An apartment unit in Taiwan’s most expensive community, The Palace (帝寶), will be put back on the market next month after the auction winner failed to close the deal before the deadline on Tuesday, fueling overpricing concerns.
The unit, measuring 164.86 ping (544m2) on the fifth floor of the landmark complex near the intersection of Renai Road and Jianguo S Road in Taipei, was auctioned on Tuesday last week for NT$282 million (US$9.14 million), almost 20 percent higher than the asking price of NT$236 million.
The turnaround prompted speculation that quick returns on luxury housing investments were exaggerated after the auction, real estate analysts said.
The auction outcome had set a new record for luxury housing in Taiwan with a price of NT$2.06 million per ping. No records were available for rumored transactions of higher value.
“The development subjected the value of luxury housing to another test and the market won’t know the answer until the dust settles,” Stanley Su (蘇啟榮), head researcher at Sinyi Realty Co (信義房屋), said by telephone.
Taiwan Financial Asset Service Corp (台灣金融資產服務公司), the organizer of the previous auction, is expected to arrange a new bidding process next month.
The previous winning bidder, Yu Chang-che (俞昌哲), the son of renowned property investor Liu Yue-chai (劉月釵), pulled out at the last minute, probably because he frowned on the risks posed by legal disputes associated with the former owner, Su said.
“The investor will have to spend more if existing occupants refuse to vacate the unit, driving up costs,” Su said.
Local media reported that some unidentified people have occupied the apartment since former owner Lin Fu-hui (林富慧) was put in jail last year as she could not pay back a debt of NT$120 million to another company nor NT$1 million in back taxes, and was allegedly involved in zoning irregularities in Miaoli County. Some newspaper reports said Lin owed more than NT$200 million in debt and taxes.
While Su said housing ownership in the complex remains attractive given the rosy outlook for the property sector, another real estate broker, who asked not to be named, said concerns over the government’s fresh tightening measures scared away the investor.
Minister of Finance Lee Sush-der (李述德) said on Friday last week the ministry was studying plans to tax capital gains from short-term housing transactions. He said frequent transfers of housing units contributed to unaffordable residential property prices and the ministry would take up the issue if doing so didn’t hurt the economy.
The minister declined to elaborate on the tax rate or other details.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone