Taiwan’s housing prices might rise another 10 percent this year in locations with noticeable land supply and amid planned high-tech plants, as record-low interest rates would continue to motivate potential buyers, Cushman & Wakefield Taiwan (戴德梁行) said yesterday.
The housing market is likely to consolidate this year following nationwide price hikes last year, supported by excessive liquidity and ultra-low interest rates, Cushman & Wakefield Taiwan managing director Billy Yen (顏炳立) told a news conference in Taipei.
The central bank’s selective credit controls, which cap loan-to-value ratios at 55 to 65 percent for purchases by corporate and multiple homeowners, as well as on unsold houses and land financing, are intended to deter speculation and would not affect people with real demand, Yen said.
Photo: Hsu Yi-ping, Taipei Times
“I would suggest buyers with real demand quit waiting and take advantage of unprecedented low borrowing costs and own a home if they intend to,” Yen said, adding that global central banks would stand by their loose monetary policies this year and beyond.
Investors, on the other hand, should think twice about seeking to take profit in property investments, as policymakers have pledged further tightening measures if necessary, Yen said, calling the latest credit controls “prudent and effective.”
Against the backdrop, housing projects in rezoning areas in the six special municipalities might climb another 10 percent this year, and two and three-bedroom apartments would continue to dominate the market due to their relative affordability, he said.
New housing projects in locations near forthcoming technology plants across Taiwan would also be popular, as the jobs they create would spur real demand, Yen said.
Foundry company Taiwan Semiconductor Manufacturing Co (台積電), passive components maker Yageo Corp (國巨) and pure-play gallium arsenide foundry supplier Win Semiconductors Corp (穩懋半導體), among others, have announced plans to build new plants in Tainan, Kaohsiung and other places to meet growing market demand.
The presale project market in specific areas would remain warm this year, while the market for existing houses might start to pick up momentum, Yen said.
Cushman & Wakefield Taiwan expects liquidity-driven rallies to drive up office prices this year, aided by companies returning from abroad to cope with US-China trade tensions and a global supply chain realignment.
The pace of increase in land prices might slow down this year after probably hitting their peak last year, allowing the trading volume to further expand, Yen said.
The landscape for luxury houses would remain rugged ahead due to unfavorable financing and tax terms, as well as shrinking room for investment gains, he said.
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