Thu, Jul 19, 2007 - Page 12 News List

Luxury housing leads ongoing property market boom

By Jessie Ho  /  STAFF REPORTER

Led by high-end housing, the nation's property market continued to boom in the second quarter of the year and is expected to keep expanding over the next six months, driven by various government incentives, a report released yesterday by Shining Group (鄉林集團) said.

During the previous quarter, 22,737 housing units worth a total of NT$229.9 billion (US$7 billion) were put on sale, compared with 24,092 units worth a total of NT$199.73 billion in the same period last year, the Taichung-based property developer said.

"This shows that although the volume of houses on the market is decreasing, the value is increasing significantly, supported by red-hot high-end luxury properties," Shining chairman Lai Cheng-i (賴正鎰) said at a press conference yesterday.

"The market is neither overheated nor cooling," Lai said.

The construction sub-index rose by 3.64 percent yesterday on the Taiwan Stock Exchange, beating a 0.26 percent loss on the benchmark TAIEX.

Luxury properties have become mainstream products, with the highest per ping price reaching NT$1.3 million.

The soaring prices are attributed to the rising price of land and cost of construction materials, Lai said. During the first half of the year, property prices rocketed 15 percent to 30 percent compared with last year, the biggest range since 2003, Lai said.

In the first half of the year, housing supply in Taichung and Hsinchu increased 83.8 percent and 81.4 percent respectively in value, helped by the launch of the high-speed rail, the report said.

Supply in Taipei, however, decreased by 23.9 percent in value and 16.7 percent by volume because of limited land, it said.

For the second half, Lai predicted that housing prices would keep rising by 10 percent to 20 percent, especially those on the outskirts of prime city centers.

As banks tighten housing loans, homebuyers will be the main force, while investors will stay on the sidelines of the market, Lai said.

Overall, the property market is set to continue prospering, propelled by government incentives ahead of the legislative and presidential elections, he said.

The government announced last month that it would transform some farmland into pricey countryside residential communities. Earlier this month it said it would carry out several urban renewal projects.

An anticipated liberalization of restrictions on Chinese tourists and direct cross-strait transportation has also attracted foreign investors to Taiwan's property market, including Chinese investors, Lai said.

"The arrival of Chinese investors will boost the market significantly," Lai said.

He estimated that Chinese investors would inject NT$200 billion into the property market annually if restrictions on Chinese investment were removed.

Lai has invited the top 30 Chinese property developers to visit Taiwan at the end of the year, he said.

To prevent construction costs from soaring and causing inflation, Lai suggested that the government wait before putting state-owned land on the market and allow gravel extraction from river beds to ease rising gravel prices.

Lai said that he would soon meet Vice Premier Chiou I-jen (邱義仁) and representatives from various businesses to discuss these suggestions.

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