Successful sell-off of state-owned land shows real estate market strong

July 27, 2005

Despite global concerns about real estate bubbles in certain major markets, the sell-off of over NTD 700 million in state-owned land in mid July demonstrates that Taiwan's real estate market is set to experience big growth in the coming future, Su Wei-cheng, director of the Northern Taiwan Office of the Ministry of Finance's National Property Bureau, said after the property sale.

The office received 221 bids for twenty plots in the one-day sale. It succeeded in selling off 85% of the plots. One piece of land on Hoping East Road, Section 1, sold for a pricey NTD 2.5 million per ping, a price even higher than the NTD 2.27 million per ping paid by Cathay Real Estate for a plot in the in-demand Hsinyi Planning District last year.

Su said that the office does not intend to sell any of its land in the Hsinyi Planning District this year.

Su also verified media reports that foreign investors have expressed interest in investing in Taiwan's real estate market. As proof, he noted that a high-level executive at a well-known foreign investment firm approached him about a month ago with NTD 10 billion in hopes of purchasing a plot of state-owned property in the Hsinyi Planning District. Unfortunately, the bureau had no appropriate sites in the district. Su is now helping this firm locate a piece of state-owned property with an area of 1,000 ping in a mature commercial district.

The foreign executive stated that uncertainties regarding cross-straits relations have disappeared recently and that Taiwan's real estate market remains at a low point, and added that, considering the overheated condition of the global market, Taiwan is a place to invest, according to Su.

Taiwan's real estate market has just begun rising from a ten-year low, but has only grown 30% so far. Su said the market will continue to expand through the end of this year and even up until the start of the 2008 Olympic Games in Beijing.

Su said that the opening of Taiwan to Chinese tourists and the relaxation of regulations to allow Chinese investors to acquire real estate in Taiwan would have a major impact of the local market. He asserted that these factors would push the market up another one to two times more than it has grown thus far.

Su cited the example of Hongkong's real estate market. After the handing back of Hongkong to China in 1997, the market there sustained a 30% decline, which is about the same as the worst drop Taiwan's real estate market has ever experienced. However, the opening of the Special Administrative Region to tourists from China subsequently caused the market to expand by three times.

(Central News Agency)

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