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Mon, Jul 30, 2007 - Page 11 News List

Status, cash driving luxury apartments

M-SHAPED HOUSING The rich and many China-based Taiwanese are driving up the average price of houses and apartments, but every market has a bubble -- eventually

By Jessie Ho  /  STAFF REPORTER

Buildings off Jianguo S Road and adjacent to the Da-an Forest Park in Taipei's Da-an District offer residents easy access to lush parkland.

PHOTO: LIN MEI-FEN, TAIPEI TIMES

"Bringing you the life of royalty." "Majestic views." "The last quintessence of Taipei City." "Ultimate luxury and pleasure."

These are some of the eye-catching slogans of property advertisements that appear on building walls, in newspapers and on fliers distributed in the streets.

The demand for housing is now about much more than basic comfort and affordability.

Three years ago, some observers were dumbfounded when Hung Sheng Construction Ltd (宏盛建設) launched the landmark residential complex The Palace (帝寶) in central Taipei with the selling price of NT$1 million (US$30,400) per ping (3.3m2).

Brandishing luxury decor, a top location and roomy interiors, the The Palace complex was the nation's most expensive top-end residence with prices ranging between NT$130 million and NT$300 million per unit.

Defying the received wisdom that sluggish sales accompany properties for the very wealthy, The Palace's apartments sold out.

There is less surprise over the prices of such apartments now that an increasing number of luxury complexes have made their presence felt in Taipei City over the past three years. The average size of an apartment has also expanded from the common 30 ping or 40 ping to 50 ping and even 120 ping.

The highest price tag so far was set by China Medal Products Group (勤美集團), which this year opened a residential complex near Da-an Forest Park at NT$1.3 million per ping.

China Medal Products Group will not hold the title for long, however. Its record will soon be broken by Shining Group (鄉林集團), which is expected to price its latest housing complex at NT$1.5 million per ping.

"Luxury properties have become a mainstream product in the market, especially in Taipei City," Shining chairman Lai Cheng-i (賴正鎰) said.

Shining, the constructor and operator of the famed upscale resort The Lalu (涵碧樓) at Sun Moon Lake (日月潭) in Nantou County, acquired a 1,135.02 ping plot of land near the Shilin Official Residence for NT$1.55 billion (US$47 million) last year.

To trump its competition, Lai said Shining would build top-end apartments based on a sumptuous "Lalu style" resort theme, adding that more than half of the 25 units have been purchased even before construction begins.

According to Shining's latest market report, during the last quarter 22,737 housing units worth NT$229.9 billion went on sale, compared with 24,092 units worth a total of NT$199.73 billion in the same period last year.

The figures show that the number of houses on the market is decreasing, but that the value is increasing significantly, supported by high-priced luxury properties.

Transactions of luxury apartments and houses in Taipei City for the first half of the year jumped 75 percent from the same period last year, according to data compiled by Evertrust Rehouse Co (永慶房屋). Transactions for such properties in Taipei County rocketed ahead by 233 percent in the same period, the data showed.

A good number of buyers of such niche properties are overseas Taiwanese businesspeople, mostly China-based, who have invested in the properties to save tax and demonstrate their wealth.

And the purchasing power of this segment of high-income buyers has remained intact even after banks tightened housing loans to cool off the housing market and avoid the risk of a new credit abuse storm.

`M-SHAPED SOCIETY'

Vigorous sales in expensive apartments have been attributed to a shift in overall income structure. Like Japan, Taiwan has emerged as an "M-shaped society" -- a concept discussed by the Japanese business strategist and author Kenichi Ohmae.

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