It is forecast that commercial property market conditions in Taipei are likely remain slow over the next several months. Tighter investment thresholds will continue to restrict life insurance companies, which accounted for over half of the transactions that were closed in 2012.
This figure was down 16 per cent compared with 2011 figures. The lower numbers can be linked to the Financial Supervisory Commission’s decision to raise the minimum rental yield on real estate investments by life insurance companies to 2.875 per cent from 2.125 per cent, according to Colliers International Taiwan Ltd. As a result the quarter-on-quarter trading volume dropped between October and December.
Billy Yen, the general manager of TDZ, said he expects this slow down to extend through the first half of 2013. The Commission has advised insurance companies that they should refrain from making “aggressive real estate investments.”
The stricter regulations have already had an impact on the market. Properties located in popular locations have had trouble meeting the previous requirement of 2.125 per cent due to higher property prices and flat rental rates.
However insurers remain the largest buyer of real estate in Taiwan. A total of 61.85 per cent of sales involved insurance companies as purchasers, as opposed 13.67 per cent of deals where developers or construction firms bought commercial properties, according to figures released by Colliers International.
As far as land is concerned, the market was unaffected by the government measures in 2012. In fact the total value of deals closed rose significantly, making the annual total the second-highest in history.
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