Taipei’s commercial property market experienced record growth in 2007 last year, however this year is a completely different story. Signs of an overheated market are on the horizon, and many in the industry have voiced their concerns. Among the vocal groups are construction companies in Taiwan who are members of the Chinese National Association of General Contractors. They recently announced a planned three day strike starting on March 11 if the government does not resolve the issue of high construction material prices.
With the price of materials increasing and pushing up the overall price of commercial property, the situation could halt all on going deals. According to the managing director of real estate services for Jones Lang LaSalle Taiwan, Tony Chao states, "Demand has doubled and there's also plenty of supply. But, as always, pricing determines whether deals can be closed if property owners keep raising them."
For sellers, the current high prices are a blessing, but if they continue to increase, the demand will seemingly disappear. The price of materials in Taiwan has surged in the past few months with the exponentially increasing demand for the same items from developing economies such as Russia, Brazil, India, and China.
CNAGC executive member and Dafon Construction Co. President Hung Chechi brought attenten to the fact that there are nearly 5,000 fewer construction firms in Taiwan than there were as recent as two years ago. He added, "Over 40% of the businesses were forced to close due to irrational price surges over the past years."
Veterans Company Chairman and CNAGC executive member added, "The price rising trend has gone out of control. Many firms must complete projects based on the originally signed and agreed upon bid price." He further added, "As a result, the planned profits have all be consumed by the skyrocketing costs."
