Downtown Taipei land sold at record prices

TAIWAN’S government has sold land in downtown Taipei at record prices, indicating demand for premium housing units amid improving ties with China, the island’s biggest property broker said.

A 401 square metre site fetched NT$731 million (S$32 million) at an auction yesterday, after NT$789 million for 384 sq m sold on Jan 28, data from the National Property Administration website showed. These were the highest prices for residential land in Taipei, said Stanley Su, a senior researcher at Sinyi Realty Co.

‘These prices indicate optimism for the high-end market,’ Mr Su said. ‘There’s demand, as China-based businessmen and overseas Chinese may be coming back amid strengthening cross-strait relations.’

China and Taiwan plan a trade agreement to reduce import tariffs. The government of President Ma Ying-jeou, who was elected in March 2008 on a platform of improving relations with the island’s biggest trading partner, has eased restrictions on investments between banks, brokerages and insurers on the two sides, as well as transportation links.

Revenue from government land auctions last year totalled NT$10.8 billion, according to the Ministry of Finance.

Prices of residential property in the Taipei metropolitan area rose 20 per cent last year after banks cut mortgage rates to the lowest since records began, according to Sinyi Realty.

The central bank has held its key interest rate at a record low of 1.25 per cent in the past 12 months to help boost the economy. Gross domestic product in Taiwan expanded at the fastest pace in five years in the fourth quarter.

Taiwan and China have been ruled separately since Chiang Kai-shek’s Kuomintang, or Nationalists, fled to the island after being defeated by Mao Zedong’s Communists in 1949. China regards Taiwan as part of its territory.

Source: Business Times, 27 Feb 2010

Taiwan property market may improve: survey

Two out of five Taiwanese companies expect the island’s property market to improve in the first quarter as the economy recovers, twice as many as those forecasting a decline, the government said.

Of the 141 companies surveyed between Nov 12 and Dec 7, 41 per cent said the real-estate market will improve, the interior ministry’s Architecture and Building Research Institute said in a statement yesterday. Twenty per cent of companies said they expected a deterioration.

The real-estate market is bolstered by record-low interest rates and signs Taiwan’s economy is emerging from a recession. Central bank governor Perng Fai-nan said last week the monetary authority will monitor property-price inflation closely.

Home prices may be under ‘huge pressure’ to decline because of oversupply, the government said in yesterday’s statement.

‘People need to be careful while being optimistic about the property market’ as about 12 per cent to 15 per cent of Taiwan’s residential units are vacant, noted Chang Chin-oh, director of the Taiwan Real Estate Research Centre at the National Chengchi University, which produced the survey. He spoke at a press conference in Taipei yesterday.

The central bank has left borrowing costs unchanged at their past four quarterly meetings to help pull the economy out of recession. The island’s gross domestic product (GDP) shrank the least in a year in the three months ended September, and may expand 4.39 per cent next year, according to the Cabinet’s statistics bureau.

Source: Business Times, 29 Dec 2009