Property prices in Taiwan may rise at least 30 percent near the nation’s main airport once the government renovates terminals and completes a rail link to the capital city, CLSA Ltd said.
“This will be a big boost,” Tayher Lim (林泰禾), a property analyst at CLSA, said on Friday. “Once the train is ready, a 30 percent surge in housing prices won’t be a problem.”
The remodeling of Taipei Taoyuan International Airport’s first terminal will be completed by August next year, Deputy Minister of Transportation and Communications Yeh Kuang-shih (葉匡時) said on Friday.
A new rapid transit system to the airport will be ready between 2014 and 2015, Yeh said.
The government has budgeted NT$293.7 billion (US$9.2 billion) over eight years to overhaul airport infrastructure, including roads, to boost the economy. The upgrade will help absorb surging traffic amid improved relations with China, the largest exporter to Taiwan.
The airport overhaul was among President Ma Ying- jeou’s (馬英九) campaign pledges before taking office in May 2008. His 12 “Love Taiwan” infrastructure projects will cost an estimated NT$3.99 trillion over eight years. The government is hoping for a turnaround in its economy, which shrank 1.29 percent in the third quarter.
Taiwan and China resumed direct flights, shipping and postal services in December 2008. Direct flights operated exclusively by Taiwanese and Chinese carriers more than doubled to 270 a week in December from August.
The investments at the airport will boost the property market in the “long term,” said Peter Tseng, a manager at Sinyi Realty Co (信義房屋), Taiwan’s biggest real estate broker.
“We can see a surge after the entire project is completed,” he said.
The train system now under construction will ease congestion and pare traveling time, while an aviation park will offer businesses a free-trade zone, including tax breaks and exemptions, Yeh said.
“There’s limited land around that area so the demand will cause land prices to spike,” Monika Yang, who helps oversee US$2 billion at Hamon Asset Management Ltd in Hong Kong, said by telephone in Hong Kong. “The business people would also want to buy apartments near the airport to facilitate their travel.”
Tourist arrivals from China surged more than threefold last year to 970,000, and the Tourism Bureau is expecting 1.1 million this year, bureau spokesman Wayne Liu (劉喜臨) said by telephone.
A total of 4.8 million overseas visitors are expected this year, from 4.4 million last year, Liu said.
The airport’s first “facelift” in more than 20 years has become more urgent as the government aims to double the total number of users to more than 50 million when the project is completed, from the 20 million now, Yeh said.
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