Commercial property prices climbed 17 percent one year after the implementation of the real-price registration requirement on Aug. 1 last year, suggesting optimism on the part of investors about the market outlook, CB Richard Ellis Ltd’s (CBRE) local unit said in a report.
The price uptrend came despite a sharp decline in transactions because domestic life insurers are temporarily banned from investing in real-estate, the report said.
Individual buyers accounted for the bulk of transactions for the past year with office space priced between NT$10 million (US$333,556) and NT$30 million making up 40 percent of the deals, the report showed.
Meanwhile, office space measuring 100 ping (330m2) accounted for 76 percent of trade, according to the report.
“The data pointed to a preference for low-priced, small and old commercial properties,” CBRE Taiwan managing director Joseph Lin (林俊銘) said in the report.
That is because such property is relatively affordable for individual buyers since new office buildings are mostly in the hands of business groups, Lin said.
Office space of older than 30 years accounted for 35 percent of the transactions, while office space of 20 years old constituted 75 percent, the report found.
Institutional players have no intention of putting their properties on the market due to a string of unfavorable policy measures, notably the special sales levy that subjects properties resold within two years of purchase to taxes of up to 15 percent, the report said.
Judging by geographic breakdown, most deals are concentrated in Zhongshan District (中山), followed by Xinyi District (信義), the report said.
Lin suggested prospective investors pay attention to properties located near planned build-operate-transfer (BOT) development projects because their value will go up as during the planned construction.
Separately, the presale and new home market flashed yellow-blue for the second straight month last month, suggesting sentiment is shifting gears for two months running, according to a report by the Chinese-language Housing Monthly.
New construction volume surged 91 percent to NT$93.1 billion in last month from June, while property advertisements shrank 18 percent, the report said.