Luxury housing, smaller property units on the rise

Driven by a widening gap between rich and poor, the nation's housing market is becoming more polarized too, with high-end residential complexes recently coming under the media spotlight.

On Thursday, Shin Kong Life Insurance Co (新光人壽) offered "sky-high" prices of NT$6.38 billion (US$197.5 million) to acquire two residential plots of land adjacent to Taipei's Da-an Forest Park (大安森林公園) in a government-held public auction.

Market watchers said the insurer's housing project will have to be sold at a minimum of NT$1 million per ping (3.3m2) to be profitable.

But this is not an isolated case. Last year, 1,249 units of such exorbitantly priced property were introduced onto the market in Taipei City alone and transaction volumes grew by 25 percent from 2004, according to statistics compiled by Sinyi Royal (信義豪宅).

Sinyi Royal is a subsidiary launched by Sinyi Real Estate Inc (信義房屋) in 2004 to market and broker exclusive housing products.

Around 42 percent of the 1,249 units were traded at more than NT$50 million each and 10 percent had price tags topping NT$100 million, it added.

"With people's earnings rising and more upstarts created amid the high-technology wave, demand for luxury housing units is surging," said Mu Chun-sung (穆椿松), chairman of the Taiwan Construction Development Federation (台灣省建築開發公會), on the sidelines of a press briefing yesterday.

"It's inevitable that the real estate market will see a polarization," he noted.

While sumptuous complexes clustering in the capital's Da-an and Xinyi districts are offered at more than NT$600,000 per ping, apartments in the city's Wenshan and Neihu districts are relatively cheap with each ping sold at NT$300,000 or below.

Mu said the capital's downtown area has shifted from Wanhua District in earlier days toward the east along with the establishment of highways and spacious green parks.

Sinyi Real Estate, the nation's largest housing agent, spotted another trend of developing "small housing units," fueled by the declining birth rate and the surging number of singles, it said in a report released last week.

"Against the backdrop of low interest rates, many first-time home buyers have poured into the market, leading to changes in the size of the new housing products offered," said Victor Chang (張欣民), director of the research and development division at Sinyi Real Estate.

Transactions of apartments measuring under 20 pings grew by 7 percent last year from five years ago, demonstrating great potential.

However, with prices of raw materials and technology climbing, Mu predicted that first-time home buyers might not be able to afford newly built houses in 10 years' time.

Their choices will be limited to second-hand apartments, he said.