Taiwan’s public perception has improved

After the presidential election, the public's perception of Taiwan's real estate market improved, buoyed by an increased economic interflow between Taiwan and China.

Investment in the commercial market reached a record high of NTD119 billion in 2007. Foreign investors played a key role, accounting for 40.5% of the total transaction amount. With capital coming from overseas, the investment market thrived. At the beginning of 2008, the market sentiment was very positive regarding China's relationship with Taiwan.

After the election, the new president announced several measures to strengthen the cross-strait relationship. The commencement of direct flights and an expansion of cross-strait trade will benefit Taiwan's economy and create a demand in the real estate investment market.

As landlords expect the new cross-strait policies will attract overseas capital to invest in Taiwan real estate market, they increase the asking price dramatically, expanding the transaction price gap between the seller and buyer and resulting in languishing investment activities in the first five months of 2008.

This market performance was under general expectation and reflected the landlords held a quite optimistic perspective in future market. Even though the investment activities slumped in the first five months of 2008, both foreign and local Investors still have a positive outlook for Taiwan's investment market this year, as the cross-strait relationship will be strengthened, the macro economy will improve, and this will lead to a thriving real estate investment market. Taiwan's investment potential looks set to be greater than any other Asian countries.

Written by: Judy Chen, Savills (Taiwan)