Thu, Jun 14, 2007 - Page 12 News List

Farmland bill praised by realtors

NEW DEVELOPMENTS Other real estate experts appeared more cautious about the proposal and said that location would always be key in the market


Realtors welcomed the Cabinet's proposal to transform some farmland into countryside residential communities, saying the project would benefit farm owners, construction firms and home buyers.

"The project will benefit all three parties that are involved," Benson Liao (廖本勝), president of the Evertrust Rehouse Group (永慶房仲集團), said by telephone yesterday.

Owners of selected farmland would be able to sell their land at market prices, construction firms would have more land on which to construct housing units, while buyers would be able to purchase country homes at lower prices, Liao said.

According to the Cabinet's draft of the act for rebuilding farm villages (農村改建條例), the government plans to transform 10,000 hectares of farmland nationwide into residential communities, each measuring at least 25 hectares, about the size of Da-An Forest Park in Taipei.

Land that is close to cities or with convenient public transport connections would be identified and acquired by local governments and later auctioned off to construction firms.

After deducting the cost of acquiring the land from the selling price, 40 percent of the profit would be paid to the previous owners, 30 percent would go to a fund for rebuilding rural villages, with the remaining 30 percent going to the local government.

Liao said that construction firms, that have been scrambling to acquire a decreasing supply of land in cities, could buy land in the countryside to build vacation homes or communities for the elderly as the nation's population demographic continues to age.

The low building coverage ratio -- the ratio between the area occupied by a building and the overall area of the site -- would guarantee a good quality of life for buyers, he said.

The building coverage ratio for the new developments is 30 percent, meaning, for example, that firms would only be able to build a 30-ping house on a 100-ping plot, while the rest of the space would be used for lawns and community areas.

The ratio for residential areas in cities is 60 percent, for industrial zones 70 percent and for designated commercial areas it is 80 percent.

Another real estate expert appeared more cautious about the draft bill. Su Chi-jung (蘇啟榮), a director at Sinyi Real Estate Inc (信義房屋), the nation's largest housing agency, said for the commercial property market, location would still be the key.

Land close to Taipei City, for example, would attract more bids from construction firms. Plots along the route of the high-speed railway would also be preferential buying targets, Su said.

Construction stocks did not seem to gain much of a boost from the proposed policy yesterday, as the construction sub-index rose by only 2.14 percent.

"The overall outlook for the property market has showed signs of stagnation or even decline, which mitigated the boost the farmland could have given the market," said Alex Huang (黃國偉), vice assistant president at Mega Securities Corp (兆豐證券).

The mainstream product remains luxury apartments priced at NT$1 million (US$30,267) per ping or above, while the demand for vacation homes in the countryside or retirement properties is not strong, Huang said.

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