Taiwanese life insurance companies and developers and foreign funds plan to invest NT$150 billion (US$5.08 billion) in local commercial properties this year to improve earnings and use up idle funds, Savills Taiwan Ltd (第一太平戴維斯) said yesterday.
The UK-listed real estate service provider expects property prices, both commercial and residential, to stay firm despite a series of government measures to cool the market.
“More funds will flow into the commercial property market this year, encouraged by stable rental incomes and low capital costs,” managing director Cynthia Chu (朱幸兒) said.
Chu expects domestic insurers to channel NT$90 billion into real estate investment this year, while foreign funds will put in another NT$30 billion, based on interviews with different firms. Local land developers and investors from other sectors plan to contribute another NT$30 billion.
Chu, whose company was ranked the world’s fourth largest real estate brokerage by turnover last year, said property price corrections were unlikely as long as interest rates remained depressed while liquidity was ample.
“That is why we expect the luxury tax will have a limited impact on property prices, though it may slow transactions for a while,” she said.
The market could start to reverse if interest rates for home loans rise from lower than 2 percent to 4 percent and the loan-to-value ratio is capped at below 60 percent, from the current 65 percent, Chu said.
Frank Marriott, company senior director for real estate capital markets, said foreign funds are interested in joint development ventures in the region, including Taiwan, where rental yields are too low to be attractive.
Asian markets generated 41.3 percent of the company’s total revenue last year, up from 37.5 percent a year earlier, Savills statistics showed.
Raymond Lee (李偉文), company chief executive in Greater China, agreed, saying that home trading in Hong Kong fell 30 percent after the introduction of stamp duty, but prices continued to rise.
Lee said the duty and other tightening measures had failed to curtail demand in Hong Kong, especially for luxury housing units due to their limited supply.
Lee, who helped close NT$75.8 billion in property deals in the territory last year, said there was no fear of a bubble bursting as long as interest rates remain below 5 percent.
Albert Lau (劉德揚), Savills executive director in China, said he remained bullish about the property market in the world’s most populous market where property transactions had plunged 60 percent to 70 percent following assorted credit controls.
“A population of 1.37 billion and the fast-growing economy bode well for the property sector,” Lau said.
The company employs 21,000 staff in 200 offices across 36 countries, with a workforce of 17,384 in Asia.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort