Abstract
Easing in monetary policy by the Central Bank of China appears to have placed
a floor under Taiwan’s
residential and commercial property
markets.
Statistics indicate that office rents have been rising modestly.
House prices have been falling, after yearon-
year (y-o-y) increases,
since late 2008. Nevertheless, the pace of decline has been far less than in
other
countries in the Asia-Pacific.
Transaction volumes outside the
housing market have been low. Nevertheless, there have been some
signs of
interest in commercial real estate on the part of major insurance companies
and other institutional
investors. A key theme through Q209 has been the
general improvement of relations between China and
Taiwan and the
reduction to barriers to investment flows across the Taiwan Strait. A wildcard
– and a
positive one – would be further liberalisation that
permits mainland institutions to become substantial
investors in Taiwanese
commercial property.
Bearing in mind the factors that contribute to
Taiwan’s Real Estate/Construction Business Environment
Rating
(RECBER), we suggest that the following are the key issues to monitor for the
real estate sector in
the coming year or so:
- The potential for
construction activity to keep pace with demand once the economy recovers.
- The relatively strong and growing availability of finance.
- Sluggish
property prices and office rents
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