An old, small three-story building in Taipei’s Songshan District (松山) sold for a record-high price despite a sluggish market, signs that urban renewal projects have started to gather momentum, analysts said yesterday.
The more than 40-year-old apartment building sold for NT$290 million (US$9.08 million) in November last year — or about NT$5.06 million per ping (3.30579m2) — with a total floor space of 57.28 ping, the latest real-price transaction data released by the government showed yesterday.
The building is on a 72.6 ping plot of land near Raohe Street Night Market (饒河街夜市), one of the oldest and must-visited locations in Taipei, with shops within walking distance from Songshan MRT Station. Slightly south of the station is the Wufenpu (五分埔) clothes area.
The deal translates into NT$3.99 million per ping for the land, government data showed. The buyer intends to demolish the building and construct a new one.
“The sale was a record in terms of land and floor space prices,” Great Home Realty Co (大家房屋) researcher Mandy Lang (郎美囡) said by telephone, adding that market rates stand at about NT$2 million per ping for storefronts and NT$700,000 per ping for older apartments in the area.
Lang attributed the unprecedented prices to the government’s encouragement of urban renewal projects, especially for buildings more than 30 years old, to enhance building safety and domestic demand.
About 140,000 buildings nationwide are more than 30 years old with 50,000 in dire need of repairs and reinforcement, the Ministry of Interior said, which has proposed preferential floor space terms and property tax discounts to motivate builders and homeowners.
The record prices came despite drops in real-estate prices of about 10 percent in Taipei since 2014, government data showed.
The buyer, New Taipei City-based property developer Great House Development Co (大家地產), is in talks to redevelop older apartments near Raohe night market, H&B Realty Co (住商不動產) broker Liu Ming-che (劉明哲) said.
On the ground floor, a shoe retailer pays about NT$200,000 in rent per month, which is not attractive enough to push prices to such high levels, Liu said.
The deal is a sign that urban renewal is likely to be the growth driver for the real-estate market after years of slowdown, with transactions falling to a record low last year, Liu said.
Urban renewal projects have come to a standstill in Taipei after a family who did not want to move disrupted construction on the Wenlin Yuan project (文林苑) in Shilin District (士林) for years.