Shida realty sales bearish due to declining rent
The China Post news staffTAIPEI, Taiwan -- Property sales at the National Normal University business circle have slowed down on declining investment returns, brokers said yesterday.
January 22, 2013, 4:19 pm TWN
They made the remarks after reports that some properties in the area remained unsold even after sellers slashed their offering prices by 40 percent.
“This is not something that can be solved by a price reduction,” said Liu Yi-jung, broker with Taiwan Realty. “The real problem is a steady rent decline, which will weaken investment yield.”
“Say you purchased a storefront at NT$100 million, and you rent it out for NT$300,000 a month. That's a yield of 3.6 percent,” she added. “Yet there is a possibility that the rent will drop to NT$200,000 next year. If this goes on, buyers will no longer be able to pocket gains from their investment, and that's why they refrain from buying.”