Land transactions last quarter fell to a three-year low of NT$44.5 billion (US$1.55 billion), as credit controls and interest rate increases generated caution among developers, the local branch of international property consultancy Cushman & Wakefield said last week.
“This segment of the property market has sensed the chilling effect caused by waves of credit controls and the interest rate hike in March,” Cushman & Wakefield Taiwan said.
Even though the central bank last month said its policy rate increase of 25 basis points was not aimed at the property sector, the move would raise costs of land purchases and make developers wary, the consultancy said.
Photo: CNA
The chilling effect would be more evident for small and medium-sized developers, as their larger peers have deep pockets and are therefore less susceptible to rate hikes, it said.
Affluent developers would likely press ahead with land acquisition to meet development needs, but they would grow more cost-conscious, Cushman & Wakefield Taiwan said.
They would also focus on joint ventures involving urban renewal projects and development projects integrated with metropolitan railway systems given a small pool of choices, it added.
The shift in sentiment is unfavorable for land transactions for the rest of the year, and the lack of supply on the horizon would also weigh on the market, it said.
Against that backdrop, market watchers should pay close attention to upcoming sales of a 26,900 ping (88,926m2) residential plot and a 17,200 ping mixed-use plot in Taoyuan’s Jhongli District (中壢), it said.
The parcels could generate NT$13 billion in sales for tire maker Federal Corp (泰豐輪胎), the owner of the plots, the consultancy said.
Another major deal this quarter would be a 2,000 ping plot in New Taipei City’s Sanchong District (三重), it said.
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