Taiwan’s land, housing and hotel prices might need to fall 10 percent this year to spur buying interest, as an economic slowdown, monetary tightening and unfavorable legislation bode ill for transactions, Cushman & Wakefield Taiwan said yesterday.
“The property market is heading for a downturn in both transactions and prices, although some developers seek to push prices higher with their own capital,” Cushman & Wakefield Taiwan managing director Billy Yen (顏炳立) said.
The strategy would prove to be overreaching and impractical in light of a global economic slowdown and monetary tightening, Yen told a media briefing.
Photo: CNA
A liquidity-driven property boom plateaued in the first quarter of last year and has since lost steam, in line with interest rate hikes at home and abroad, he said, adding that the market cannot stay dynamic in the absence of sizeable capital injection.
Commercial property transactions shrank 17.6 percent year-on-year to NT$125.8 billion (US$4.1 billion) last year, while land deals plunged more than 40 percent to NT$171.8 billion, the property consultancy said.
Investment purposes drove 55 percent of commercial property transfers, the highest ratio in the past five years and outranking self-occupancy needs, it said.
Monetary tightening is dampening investment interest and bills that would ban transfers of presale housing contracts and subject unlisted companies to obtain regulatory approval before buying real estate could trigger panic selloffs and price corrections, Yen said.
Profits from property transactions on the part of companies are subject to income taxes of 20 percent, while individuals might pay up to 40 percent, depending on their income level. The gap has driven investors to set up companies to reduce taxes when trading real estate.
Yen said prices for commercial and residential properties would need to drop 10 percent to motivate potential buyers.
Hotels in popular locations have sought to increase their value through urban renewal, but properties in second-tier locations did not benefit and should display more pricing flexibility, Yen said.
Prices for storefronts would need to fall 20 percent to attract buyers, as physical stores are facing sharp competition from e-commerce firms, and rising operation and personnel costs, he said.
Yen said a 10 percent price correction would also apply to luxury housing units to motivate owners of multiple units to invest in them to hedge against inflation and investment risks.
“Players who do not have deep pockets better play safe in bad times,” Yen said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day