Sat, Apr 07, 2007 - Page 12 News List

Realtor says Taipei boom has limits

GOLD, WITH A CAVEAT Public housing around the nation's capital and especially at prime locations will not necessarily result in profits, Sinyi Real Estate cautioned

By Jackie Lin  /  STAFF REPORTER

Public housing complexes in Taipei may be turning into gold mines due to their prime locations, but dealers suggest homebuyers should not rush to sign contracts as profits are not guaranteed.

Sinyi Real Estate Inc (信義房屋) statistics showed that 10 public housing complexes located in the city's downtown areas had enjoyed an average 86.4 percent price hike since the period following the 2003 SARS outbreak, the point when the real estate market picked up again.

Among these complexes, seven have seen the unit price per ping (3.3m2) approach NT$400,000 (US$12,000) despite the fact that the houses are over 20 or even 30 years old, said a report released on Wednesday by Sinyi Real Estate, the nation's largest housing agent.

Public housing in Daan, Xinyi, Zhongzheng and Neihu in particular have benefited from the recovery -- more so as residents there can enjoy free parking, a rare advantage in the densely populated capital.

"Although price tags have nearly doubled, these locations are still very popular and most deals close as quickly as within a month," said Calvin Wu (吳銘鴻), a manager at Sinyi Real Estate.

Even on the east side of the city, housing projects have undergone a stunning transformation.

Futai Public Housing Complex (富台國宅), for example, saw its price per ping climb 135 percent from between NT$130,000 and NT$150,000 in 2003 to between NT$320,000 and NT$340,000.

Close to the Yongchun MRT station, the trendy Xinyi district and a wet market, Futai complex remains cheaper than private projects in the neighborhood, which can sell for up to NT$700,000 per ping.

In addition, having reputable schools nearby also contributes to the attractiveness of these public housing complexes, Wu said.

Parents desiring to send their kids to Taipei Municipal Guang Fu Elementary School or Taipei Municipal Renai Junior High School might want to snatch an admission ticket by moving into the Zhongtuo Public Housing Complex (忠駝國宅) or Daan Public Housing Complex (大安國宅).

Wu said that the capital's public housing complexes were becoming increasingly valuable as they are in good locations, with large parks and "star schools" nearby.

"As the market resuscitates, the public housing upside will be higher than the market average. Even when the property sector is low, the range of their decline would be limited as well," Wu said.

Despite this, the city government auctioned off its last public housing project, the Ligong (立功) complex, in April last year at an unit price of approximately NT$205,000 per ping. Total transaction prices ranged from NT$8.53 million to NT$9.71 million per house.

Based on the prices for second-hand houses in the neighborhood, a profit margin of NT$2 million is expected once the Ligong houses come up for sale, Sinyi Real Estate said.

But the housing agent cautioned investors against hurriedly purchasing such projects, as substantial investments to replace water pipelines, power lines and damaged toilets and kitchens are often necessary.

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