New shops in the Taipei property market are in short supply, as developers are tending to hold on to these properties in the hope that the scarce supply will continue to boost their pricing power, according to an analyst.
Ho Shih-chang (???), a research manager of the real estate market magazine My Housing (????), said that only 54 shops in 19 new residential and commercial housing projects have been put up for sale so far this year, accounting for only 38 percent of the 48 new housing projects' 142 shops in the city.
Ho said that the developers still hold more than 60 percent of the new shops, as they simply want to hoard them for higher prices down the road.
Out of the 54 new shops unveiled by their developers, 21 were in a project located in Zhongshan District, near the Rongxing Garden Park, while the remaining 33 were in 18 other housing projects, Ho said.
He said that although the local property market remains slow, the impact on shop sales appears limited, in particular in Taipei, which is the most closely watched property market in Taiwan.
Real estate market analysts have widely anticipated that transactions of homes, shops and offices for the whole of 2016 could fall below 250,000 units, down from 292,550 units in 2015, in reflection of recent efforts by the government to curb skyrocketing home prices.
However, Ho said that new shops in Taipei carry a price tag of about NT$1.7 million (US$52,659) per ping (one ping equals 3.3 square meters) on average this year, compared with about NT$856,100 asked by residential housing developers on average, indicating that the commercial property market, in particular the shop development market, remains relatively strong.
The fall in the availability of new shops in Taipei comes after more and more residents in the city desire a quiet living environment without disruption by business activities, so that developers have had no choice but to scale down supply, Ho said.
Ho said that shop prices are expected to stay solid due to the small supply, while home prices could trend lower in the near future, which will prompt developers to continue to hold onto their properties unless some property investor buyers persuade them to cut their holdings.
Source: Focus Taiwan News Channel