Mixed fortunes for landowners along high-speed rail link

The arrival of the first batch of bullet trains at Kaohsiung Port on Tuesday may bode well for real estate bordering the Taipei-Kaohsiung high-speed rail link, but developers are staying on the sidelines for the moment, market watchers said yesterday.

"Soaring property prices near some main stations are just a result of the hype surrounding the yet-to-be-finished high-speed railway," Victor Chang (張欣民), director of the research and development division at Sinyi Real Estate Inc (信義房屋), said yesterday.

Construction of the nation's first high-speed railway over the past few years has turned thousands of hectares of cheap farmland in five designated station areas -- Taoyuan, Hsinchu, Taichung, Chiayi and Tainan -- into golden lands, where it is hoped industries will cluster.

The already high property values near these main stations is expected to soar further. According to some estimates, the price of land alongside the rail link have surged six-fold on average since the project was announced in 1998, turning more than 4,000 farmers into multi-millionaires.

Real estate prices in the hottest zone -- Hsinchu -- for example, have jumped more than 10-fold over the past six years, Chang said. With the Hsinchu Science-based Industrial Park (新竹科學園區) nearby, along with the Sun Yat-sen Freeway to facilitate transportation, Chang said the Hsinchu area has the highest potential to attract residents, shopping malls, restaurants, entertainment facilities and various other services.

While the property value of less popular Chiayi and Tainan stations has risen by 50 percent, the two counties may be hollowed out, with the bullet trains transporting their residents to work elsewhere, Chang said.

"Without the support of money-making industries, the property market in the regions may not mature for at least five years after the trains start running," Chang said. "Few developers dare to buy land with such high prices now, fearing that they may not get a return."

James Tien (田大權), spokesman of real estate agent Rebar Rehouse (力霸房屋), said it was unclear whether the benefits of the bullet train would spread away from the tracks or further enlarge the gap between towns and the countryside.

"I prefer the second theory ... As we can see, there are still no large department stores near the Mucha MRT [mass rapid transportation] station nearly 10 years after the transit system started service," Tien said.

Despite government plans to develop areas near the Chiayi and Tainan stations into new urban areas, Tien said few were interested in getting a foothold there now, as township development projects such as the one in Linkou, Taipei County, had failed, he said.

"I think it will still take some time before the real estate industry pours money into the so-called golden areas," Tien said.