Factory and Office Construction Demand Strong, June Construction Industry Business Climate Hits 1.5-Year High

The Taiwan Institute of Economic Research announced on the 24th that the June Construction Industry Business Climate Index reached 108.20 points, an increase of 5.33 points from the previous month, marking three consecutive months of growth and the highest level since January 2025. The institute stated that the market has returned to housing fundamentals, although the overall impact of 'Youth安心3.0' on the real estate market will be extremely limited.

According to the institute, both current and six-month forward outlooks for the construction contracting sector show improvement. Despite ongoing challenges such as rising earthwork disposal costs, shortages of skilled labor, and increased prices for plastic-related materials, contractors continue to accelerate ongoing technology-related factory and office construction projects, driven by strong exports of ICT products and overwhelming orders for AI-related applications.

Additionally, starting in the second half of the year, major infrastructure transportation projects that have already been awarded across various municipalities and counties will begin initial construction phases.

In the real estate sector, June's building transfer volume across the six major metropolitan areas increased 11.3% month-on-month. This rise is primarily attributed to persistently high public expectations of future inflation, which continue to support owner-occupier and asset-preservation demand, along with ongoing new-home handover waves in certain urban areas.

The institute noted that buyers are shifting toward rigid demand, with total price control being a key factor, and that payment term designs significantly affect transaction efficiency. This indicates the market has returned to housing fundamentals. In the short term, the property market will remain on a stable adjustment trajectory, with only products offering price advantages and clear target customer positioning expected to perform well.

However, given that the central bank's seventh round of credit controls has not been fully relaxed and banks remain cautious in lending, the institute concluded that the overall supportive effect of 'Youth安心3.0' on the property market will be extremely limited.