TSMC effect drives real estate boom, Taiwanese investors flock to Phoenix, invest US$500 million in 6 years

Bloomberg News reported,TSMC GoArizona The factory’s establishment and subsequent expansion are transforming Phoenix’s northern suburbs.real estate Investment Hotspot. Investors who have witnessed Taiwan’s “TSMC effect” hope to replicate their profit-making experience in the United States. When local real estate agents receive inquiry calls, no matter what piece of land they are inquiring about, the most common question they ask is: How close is it to TSMC?

According to the Greater Phoenix Economic Development Council, Taiwanese investors have invested US$500 million locally since 2021.

Kevin Callihan, executive vice president of CBRE Group in Phoenix, said Taiwanese investors are clearly more optimistic about the local sector than those who have been operating in Arizona or the United States for many years, and have already taken the lead.

This confidence comes from Taiwan’s experience. Nancy Tseng, head of Funwoo, a real estate agency that sells American homes to Taiwanese buyers, said clients may not be familiar with Phoenix, but after TSMC expanded its Tainan plant, local housing prices have risen faster than in other areas of Taiwan. The successful experience of purchasing a home in Tainan in the past makes them hope to adapt TSMC to Phoenix and replicate the profit model again.

Cases of specific investment have also come to light. Tycoon Property Partners, headquartered in Washington, DC, in collaboration with senior executives from Taiwan’s technology and real estate industries purchased two pieces of land about a 10-minute drive from the TSMC plant for US$88 million. It plans to initially invest US$1 billion to develop residential buildings, multi-storey shopping malls and other facilities, and introduce brands such as Din Tai Fung and Eslite Bookstore.

Supporting this wave of investment is the demand for employment and housing brought by TSMC’s expansion. TSMC already employs about 3,500 people in Arizona and plans to hire an additional 2,500, and suppliers are also stepping up.

Data from real estate platform Zillow shows that in the North Gateway and Desert View districts surrounding the factory, home prices have increased by an average of about 53% over the past six years, greater than the 42% increase in Phoenix. Even during the post-pandemic housing market downturn, homes closer to the FAB held better values.

There has also been an increase in new residential development. An area west of the TSMC plant is expected to add 3,300 new homes, the largest development since the early 2000s, local housing research firm Belfiore Analytics reported.

However, the pace of development also brings friction. Groundwater management and state land sales regulations limit the land available for new development; Residents are concerned about the impact of a flood of new housing on water supplies, transportation, and existing housing prices.

Jim Umlauf, who has lived locally for 20 years, complained that after the construction of TSMC, nearby roads are being dug up everywhere and traffic has become worse. He and his family are planning to move out soon.