The central bank’s latest 0.125 percentage point rate increase would further dampen buying interest in residential and commercial properties, after transactions in the first eight months of the year slipped into contraction territory amid economic uncertainty, analysts said yesterday.
The central bank on Thursday raised interest rates by 12.5 basis points, in line with market expectations, after Taiwan’s consumer price growth last month exceeded the 2 percent alert level, but is expected to decline below the threshold next year.
The tightening would lift interest rates on first-home mortgages to 1.82 percent and higher for luxury homes and multiple mortgages, said Tseng Ching-der (曾敬德), research manager at Sinyi Realty Inc (信義房屋), Taiwan’s only listed broker.
For home owners who take out NT$10 million (US$31.58 million) in a 20-year mortgage, this year’s rate increases would add NT$2,313 to their monthly payments, Tseng said.
That would have prospective home buyers think twice before joining the market amid rising food and energy costs, Tseng said.
Sellers who are eager to exit the market next quarter would have to be flexible about their target prices, the analyst said, citing a recent survey that showed more than 55 percent of potential buyers would cut their budget or postpone purchases to grapple with rising interest rates.
The bleak picture would extend to the commercial property market, after land and property deals sank 20.3 percent year-on-year in the first eight months, property consultancy CBRE Taiwan said.
The latest rate hike would raise the required minimum returns on real-estate investments on the part of life insurers to 2.595 percent, a difficult challenge to overcome for objects in central locations, CBRE Taiwan said.
Life insurers would focus on investment targets that generate 2.7 percent in returns, as the central bank might raise the interest rate again in December, it said.
Continued property price increases would add difficulty to life insurers’ search for suitable objects, although domestic firms would remain willing to increase real-estate stakes, it said.
CBRE Taiwan is looking at further double-digit percentage declines in commercial property trading, as land owners would largely refuse to make concessions.
Drastic rate hikes by the US Federal Reserve would increase the chance of a hard landing in the US economy, which would be unfavorable for Taiwanese exports, the consultancy said.
The Fed raised interest rates by 0.75 percentage points earlier this week and indicated that further rounds of monetary tightening would be needed to tame inflation.
Apple Inc might make one out of four iPhones in India by 2025, JPMorgan & Chase Co analysts said yesterday, as the tech giant moves some production away from China, amid mounting geopolitical tensions and strict COVID-19 lockdowns in the country. JPMorgan expects Apple to move about 5 percent of iPhone 14 production from late this year to India, which is the second-biggest smartphone market in the world after China. It is also estimating that about 25 percent of all Apple products, including Mac, iPad, Apple Watch and AirPods, would be manufactured outside China by 2025 from 5 percent currently. The US company
HEADING SOUTH: The US company chose Kaohsiung as its site as more customers, partners and start-ups have expanded their operations to the southern city Qualcomm Inc yesterday inaugurated a new innovation center in Kaohsiung as it steps up efforts to foster local start-ups and a 5G technology ecosystem in the city, following in the footsteps of its local partners. The US chip company’s move fits the Kaohsiung City Government’s plan to build a semiconductor supply chain within the next five years, highlighted by Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) first chip plant in the city. TSMC plans to start building the factory by the end of this year, and to start production of 28-nanometer and 7-nanometer chips there in 2024. Qualcomm said it had been
SLUMPING DEMAND: Inventory has climbed by up to 12 weeks as suppliers are under mounting pressure to offload excessive reserves, a TrendForce report said The price of DRAM chips is expected to fall at a steeper rate of 13 to 18 percent next quarter, as high inflation continues to weigh on demand for consumer electronics, causing chip inventories to soar, market researcher TrendForce Corp (集邦科技) said yesterday. The downtrend in DRAM prices could extend from a quarterly decline of 10 to 15 percent in the third quarter, the Taipei-based researcher said. “Demand for consumer electronics continued to stagnate during the third quarter, which used to be a high demand season,” TrendForce said in a statement. “During the quarter, memorychip consumption and shipments both showed quarterly
GlaxoSmithKline (GSK) in July made its consumer health products division a separate entity as it transforms into a world-leading biopharmaceutical company. By uniting science, technology and talent, the company is aiming to prevent and treat diseases with innovative vaccines, specialty pharmaceuticals and general medicines. GSK’s headquarters annually invests NT$192 billion (US$6.07 billion) in research and development, focusing on immune science and advanced technologies in human genetics. GSK’s drug and vaccine development focuses on infectious diseases, HIV, oncology and immunology. Investing in clinical trial research each year, GSK also brings drug development to Taiwan. It cooperates with 17 medical institutes and research
About Author
