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Analysts predict local property prices to jump 20 percent

The property market in Taiwan is set for a boom if president-elect Ma Ying-jeou (馬英九) can improve relations with China and stimulate the nation’s sluggish economy, analysts say.

Market-watchers expect prices to increase 20 percent or more by the end of the year if Ma keeps his pledge to liberalize economic exchanges with China — and some say there are already signs of soaring prices since his election last month.

“Luxury residential property prices in certain districts of Taipei jumped one-third right after Ma’s victory,” said Chang Hsin-ming (張欣民), a marketing consultant with US-based ERA Real Estate (易而安不動產市場).

He said site visits by potential homebuyers were up 30 percent to 40 percent in recent weeks, with many believing that the tense political rivalry with China will ease under Ma’s leadership.

Ma, who takes office on May 20, campaigned on a vow to help create a “common market” with China across the Taiwan Strait, improving trade and tourism by lifting barriers to the free flow of goods and people between the two nations.

Since the early 1990s, Taiwanese investors have channeled an estimated US$150 billion to China, which has become the country’s largest trading partner and biggest export market.

Doing away with trade barriers would increase the flow of money in the other direction and allow Taiwan to take better advantage of the vast new wealth being created in China today, analysts said.

A survey by North Rehouse (北區房屋), a Taipei property firm, found that 67 percent of Chinese investors were willing to buy real estate in Taiwan once restrictions are eased — and predicted prices would go up 30 percent to 50 percent by year’s end.

Despite the decades of official hostility, there are many Taiwanese based in China — and they will also be looking to channel funds back to Taiwan, Chang said.

“A more relaxed China policy will encourage Taiwan investors on the mainland to repatriate their profits back home without controls,” he said. “Such fund inflows, no doubt, will benefit the local property market.”

Andrew Liu (劉學龍), managing director for real estate firm Colliers International Taiwan, said he was “cautiously optimistic” about the outlook for the local market — particularly for commercial property.

“Taking expanded cross-strait economic exchanges into account, rental in Taipei office spaces may increase some 10 percent a year by 2011,” he said, up from previous industry estimates of a 5 percent to 7 percent annual increase.

“It is no surprise for us to see increasing property investments,” said Wu Chun-Chieh (吳駿杰), vice president of Eastern Realty (東森房屋), who predicted overall property prices will be up between 10 percent and 20 percent by the end of the year.



Also See: EDITORIAL: Ma must tame the property market
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