Q級木屋

Taipei, Feb. 7 (CNA) Transactions of commercial property in Taiwan in 2015 fell to a seven-year low at a time when the local economy was slowing down, according to a recent research report.     office rental taipei

Citing the report, DTZ, a global property sales consulting firm, said that transactions of office and shop space in Taiwan totaled NT$77.86 billion (US$2.32 billion) for the whole of 2015, down 14 percent from the previous year.

The 2015 transaction value even fell to the lowest level since 2008 due to poor performance in the local economy, DTZ said. Taiwan's economy grew only 0.85 percent in 2015, the slowest growth in six years, compared with a 3.92 percent increase seen in 2014, according to government statistics released on Jan. 29.

In addition to the weaker economic fundamentals, DTZ said that political uncertainty ahead of the presidential and legislative elections on Jan. 16, 2016 further dampened sentiment in the local commercial property market in 2015, while a tax reform to collect capital gains in property transactions also drove many investors to the sidelines.

Transactions picked up significantly in the fourth quarter of 2015, spiking to NT$48.92 billion, accounting for more than half of the total last year, but the increase failed to help the local commercial property sector climb out of the doldrums for the whole year, the property sales agency said.

The soaring transactions in the fourth quarter were largely due to investors wanting to avoid being taxed under the reformed tax law, which took effect from Jan. 1, 2016.

The law aims to curb property market speculation by imposing a capital gains tax of up to 45 percent on people who sell their commercial or residential property within a certain period of time from the date of purchase.    office rental taipei

DTZ said that the increase in transactions in the fourth quarter also resulted from a move by the government to lower the investment return requirement imposed on local life insurance companies for their property investments to 2.555 percent from the previous 2.805 percent.

The cut in the return requirement, starting from November, has prompted several major life insurers to jump into the local commercial property market and buy, which boosted the transactions in the fourth quarter.

On the back of a decline in commercial property supply in the fourth quarter, rents in grade A offices, in particular in Taipei, the most watched property market in Taiwan, showed signs of increasing, DTZ said.

According to DTZ, the average office rental price in Taipei during the October-December period hit NT$2,510 per ping (3.3 square meters) a month, up 0.4 percent from the third quarter and also up 2.2 percent from the same period of the previous year.

The year-on-year growth in office rental price in Taipei for the fourth quarter was the highest level in three years. 

(By Wei Shu and Frances Huang)