The flow of Taiwan’s outbound property funds is likely to surge this year amid growing interest in overseas markets and a continued slowdown in the domestic property market, an investment consulting firm in Taipei said on Saturday.
Asia Pacific International Property (亞太國際地產) forecast in a research note that Taiwan’s overseas investments would grow this year by 50 percent from the NT$50 billion (US$1.58 billion) seen last year, as unfavorable tax policies would continue to discourage potential buyers.
In an effort to limit market speculation, The ministry of finance is proposing a flat 17 percent tax rate on property transactions worth more than NT$40 million, which would rise to 30 percent if property is then resold within two years of purchase.
If the proposals receive approval from the legislator they will go into effect next year.
With the domestic property market slowing down, an increasing number of Taiwanese real estate sales agencies have been setting up offices devoted to facilitating overseas investments, the consultancy said.
UNCERTAINTY
Last year, transactions of homes, shops and offices in the nation totaled 320,598 units, representing a decrease of 13.79 percent from the 371,892 recorded the previous year, Ministry of the Interior statistics show, as political uncertainty and unfavorable tax plans exerted downward pressure on the market.
Last year’s real-estate data show that the market is at its slowest since 2002 when transactions of residential and commercial property in Taiwan stood at 320,285 units amid a global economic downturn caused by the burst of the dot.com bubble.
FAMILIAR
Asia Pacific International Property analyst Chang Han-chao (張漢超) said that many Taiwanese real-estate investors expressed interest in familiar markets such as Japan, Malaysia, Australia, the UK and the US.
Japan’s main attraction as an investment market is the high returns in its major cities such as Tokyo, Chang said.
THE UK
The UK is also attractive to Taiwanese investors because of its relatively stable economic growth, compared with other countries in the EU.
Australia and New Zealand are also popular because they are mature markets with transparent taxation systems and investment returns of 4 to 7 percent, Chang said.
However, Asia Pacific International Property favors the real-estate market in Malaysia, saying it is a better bet than Singapore as real estate remains undervalued in Kuala Lumpur despite an increase of more than 10 percent last year.
MALAYSIA
The property market in Malaysia has great growth potential as the country’s economy continues its upward climb this year, the consultancy said.
Taiwanese property investors are also looking at opportunities in emerging markets, including Vietnam and Cambodia, Chang said.
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