Chinese interested in property market

Chinese businesses are reportedly showing a strong interest in Taiwan real estate since the lifting of the investment ban on Chinese nationals last week, despite the imposing restrictions on travel and trade across the strait.

According to Wang Kuang-hsiang (王光祥), chairman of the Taipei Developer's Association, interest among Chinese investors has been high, with numerous inquiries made via the association.

"Chinese investors have shown a great deal of interest in office buildings in Taipei, where traffic and general infrastructure make them attractive," Wang said.

The Cabinet approved amendments to the Statute Governing the Relations between the People of the Taiwan Area and the Mainland Area (台灣地區與大陸地區人民關係條例) last Thursday, effectively permitting Chinese investment in certain areas of the real estate sector.

Regulations published by the Ministry of the Interior allow Chinese nationals, enterprises and other Chinese organizations or Chinese-invested companies in a third country to buy and sell offices, land and residences.

Chinese investors may build hotels, recreational facilities, apartments, residential buildings, plants in industrial parks and even develop new industrial zones.

Huang Chung-yi (黃忠義), chairman of the Taipei Real Estate Association was quoted in a Chinese-language newspaper as saying interest has been building since the Economic Development Advisory Conference (EDAC, 經發會) last August recommended opening the market to Chinese investors.

The report claimed that over 100 inquiries had been made so far with each inquiry looking at, on average, investing around NT$8 million.

While neither Huang nor Wang was willing to speculate on the number of inquiries, both said that most of the inquiries on investment had been made through private associations or directly with the property or land owners.

Despite the initial interest, Wang said that it would take some time before any substantial investment by Chinese companies will have any affect on the long-depressed property market.

"Until the direct links are opened with China, interest among Chinese investors will be affected by the inconvenience of the ban on direct trade and transport and the lack of supplementary measures to facilitate business across the Strait," Wang said.

Supplementary measures tabled by industry players have included the facilitation of entry and exit procedures by Chinese nationals, tax incentives and capital movement across the strait.

Changing the law to make it possible is a positive first step, but to effectively implement the policy we need to make it easier for Chinese businessmen to visit, otherwise they'll just continue to invest elsewhere, like the US, Wang said.

Derek Huang (黃正忠), head of international research at property seller CB Richard Ellis, agreed saying that the policy on eventually opening the direct links is still far from mature and that Chinese investors would take that into consideration.

Visits by mainland Chinese to Taiwan are still strictly subject to government approval, while tourists can only come if they hold citizenship in another country.