The government yesterday auctioned off four plots of residential land near the High Speed Rail (HSR) station in Taoyuan County with hefty premiums as property funds flock to the district, causing land prices to more than double in the past three years.
The four plots, measuring 4,886.69 ping (16,126m2) in total area, drew 34 bids from developers and individual investors lured by the fast-growing infrastructure facilities and significantly shorter transport times between Taipei and Taoyuan.
Hsinchu-based Truefull Land Co (竹風建設) bought two adjacent plots with record offers of NT$681,000 (US$23,400) and NT$690,200 per ping, topping their floor prices by 53 percent and 55 percent respectively, the Bureau of High Speed Rail under the Ministry of Transportation and Communications indicated.
Two individuals, surnamed Lee (李) and Hsieh (謝), bought the other two plots for NT$463,700 and NT$531,000 per ping, 17 percent and 46 percent higher than the plots’ respective asking prices, auction data showed.
The figures lifted land costs to an average of NT$537,000 per ping this year, soaring 55.2 percent from NT$346,000 per ping last year, more than double from 2010’s NT$230,000 per ping and over threefold from 2009’s NT$156,000 per ping, according to Global Asset Management Co (全球資產), an asset management unit of Sinyi Realty Inc (信義房屋), the nation’s only listed broker.
“The auction results affirm a transit-oriented urbanization process where people are willing to move to second-tier locations that are much more affordable, but require a dozen more minutes to commute from,” Global account manager Michael Wang (王維宏) said.
Existing homes are priced at NT$230,000 to NT$260,000 per ping in Taoyuan, compared with NT$550,000 per ping in Taipei, realtors said.
Cathay Life Insurance Co (國泰人壽), Kingdom Construction Corp (冠德建設) and other companies have acquired land in Taoyuan this year to take advantage of public works plans, including the construction of the Taoyuan Aerotropolis, the Wugu-Yangmei Overpass and the MRT extension project linking Taiwan Taoyuan International Airport and Taipei Main Station.
The infrastructure facilities make land in Taoyuan popular while investment restrictions freeze commercial property deals in Taipei, Wang said.
The trend is set to extend into next year with Hsinchu, Greater Taichung and Miaoli to auction land plots along the high speed railway, Wang said.
Construction of new properties in Taoyuan alone is expected to reach NT$100 billion next year, Wang said, althugh he voiced doubt that the market is able to digest the supply.
Taiwan Realty Co (台灣房屋) said housing prices may climb higher in Taoyuan in coming years after land costs pick up on the back of increased transportation convenience.