Commercial property transactions totaled NT$10.5 billion (US$334.96 million) last quarter, shrinking 62.69 percent from the preceding quarter, as price differences widened between buyers and sellers, international property consultancy DTZ said yesterday.
“The stalemate is likely to persist for years, unless sellers are willing to make greater concessions,” DTZ Taiwan general manager Billy Yen (顏炳立) said, adding that buyers would not chase prices.
Price gaps broadened to 30 percent in the July-to-September period, leaving properties that offered 10 to 20 percent price cuts still unattractive, Yen said.
The property market is in a coma, with anemic transactions, while sellers who agree to show sufficient flexibility are likely to come out ahead, Yen said.
The broker cited as an example a presale residential project in New Taipei City’s Banciao District (板橋), where the developer set prices 30 percent lower than nearby homes, with buyers snapping up the new offerings.
Another presale project in New Taipei City’s Luzhou District (蘆洲) copied the pricing strategy and was also popular with buyers, Yen said.
Factory buildings in Taipei’s Neihu District (內湖) and Taoyuan underpinned the commercial market last quarter, DTZ data showed.
Fubon Life Insurance Co (富邦人壽), the life insurance arm of Fubon Financial Holding Co (富邦金控), acquired an office building in Neihu for NT$4.08 billion, DTZ found.
The building, which has 9,000 ping (29,752m2) of floor space, might generate stable rental income for the insurer.
The investment was made possible after the minimum yield requirement fell to 2.345 percent as a result of four rate cuts by the central bank in the past year.
As for land deals, transactions totaled NT$42.2 billion last quarter, more than three times the level three months earlier, as some builders increased land inventory, DTZ real-estate appraisal director Charlie Yang (楊長達) said.
Yang said it was premature to depict the increase in land deals as a recovery, because it had more to do with the low base in the previous quarter.
The land market has yet to stabilize, as no auctions for superfices rights found buyers last quarter, Yang said.
The steep increase in holding costs for new buildings scares away potential developers, Yang said, adding that the same reason discourages urban renewal projects.
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