Commercial property transactions totaled NT$9.1 billion (US$292.9 million) in the second quarter, falling 69 percent from a year earlier and 24 percent from the first quarter, as a new property tax weighed on the market, brokers said yesterday.
“The property market apparently has yet to hit bottom, although the new property tax has settled,” said Gordon Kao (高銘頂), general manager at Savills Taiwan Ltd, the local branch of a British property consultancy.
Kao voiced concern that the local commercial property market could further deteriorate with the impending imposition of new income taxes on property gains starting next year.
The new integrated house and land sales tax requires foreign property investors to pay income taxes of between 35 and 45 percent on gains from property transactions, depending on the length of holding period, much higher than that in Japan, Hong Kong, the UK and Australia, Kao said.
The heavy tax burden could make commercial properties in Taiwan less attractive and the local market could become increasingly marginalized, Kao said, adding that soaring property prices have already squeezed rental yields.
As a result, self-occupancy purchases drove transactions during the April-to-June period, with factory office and buildings accounting for 85 percent of total transactions, Savills Taiwan said.
Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest chip testing and packaging service provider, acquired a new factory from an affiliated developer for NT$2.47 billion (US$79.5 million), making it the largest property deal last quarter.
Domestic life insurers, the major players for commercial properties, stayed on the sidelines, constrained by the minimum yield requirement of 2.875 percent, Savills Taiwan said.
The only exception was China Life Insurance Co’s (中國人壽) purchase of factory space in Taipei’s Nangang District (南港) for NT$460 million, the broker said.
China Life’s peers, such as Shin Kong Life Insurance Co (新光人壽) and Nan Shan Life Insurance Co (南山人壽), opted to buy undeveloped plots of land that are to be turned into office space.
Buying interest for office space remained low last quarter, as companies chose to lease rather than own, given high prices and risks that they could take a downturn going forward, said CB Richard Ellis Ltd (CBRE) Taiwan, the local office of a US property consultancy.
Commercial property transactions could retreat below the NT$60 billion level this year, the lowest since the global financial crisis in 2008, CBRE Taiwan managing director Joseph Lin (林俊銘) said.
On the other hand, property fund outflows might accelerate in the second half after hitting NT$42.7 billion in the first half, Lin said.
AI REVOLUTION: The event is to take place from Wednesday to Friday at the Taipei Nangang Exhibition Center’s halls 1 and 2 and would feature more than 1,100 exhibitors Semicon Taiwan, an annual international semiconductor exhibition, would bring leaders from the world’s top technology firms to Taipei this year, the event organizer said. The CEO Summit is to feature nine global leaders from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), ASE Technology Holding Co (ASE, 日月光投控), Applied Materials Inc, Google, Samsung Electronics Co, SK Hynix Inc, Microsoft Corp, Interuniversity Microelectronic Centre and Marvell Technology Group Ltd, SEMI said in a news release last week. The top executives would delve into how semiconductors are positioned as the driving force behind global technological innovation amid the artificial intelligence (AI) revolution, the organizer said. Among them,
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
Former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) yesterday warned against the tendency to label stakeholders as either “pro-China” or “pro-US,” calling such rigid thinking a “trap” that could impede policy discussions. Liu, an adviser to the Cabinet’s Economic Development Committee, made the comments in his keynote speech at the committee’s first advisers’ meeting. Speaking in front of Premier Cho Jung-tai (卓榮泰), National Development Council (NDC) Minister Paul Liu (劉鏡清) and other officials, Liu urged the public to be wary of falling into the “trap” of categorizing people involved in discussions into either the “pro-China” or “pro-US” camp. Liu,
Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said Taiwan’s government plans to set up a business service company in Kyushu, Japan, to help Taiwanese companies operating there. “The company will follow the one-stop service model similar to the science parks we have in Taiwan,” Kuo said. “As each prefecture is providing different conditions, we will establish a new company providing services and helping Taiwanese companies swiftly settle in Japan.” Kuo did not specify the exact location of the planned company but said it would not be in Kumamoto, the Kyushu prefecture in which Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) has a
RSS