Chinese are skirting rules aimed at limiting their purchases of property in Taiwan, stirring anger among local home buyers and fuelling worries over Beijing’s creeping influence over the nation.
While Chinese money has boosted property markets across the world — from Sydney and London to Vancouver — Chinese capital flows into Taiwan are an especially emotive issue for many Taiwanese. Taiwan’s government has been criticized by some for not being more restrictive on Chinese ownership of Taiwanese real estate.
Fueling fears of further encroachment by Beijing is a review of a cross-strait trade deal next month. In March and April, hundreds of students occupied the Legislative Yuan for more than three weeks to protest against the service trade pact.
Shih Ming-shih, a senior Ministry of the Interior official, said that the government had imposed measures to limit Chinese from buying too many homes as such a move “would jeopardize our national security or economic development.”
“If people do not apply legally, there is no way we can stop that, but they have to bear the risk of losing the properties they bought,” Shih said in a warning to would-be violators.
Some Taiwanese feel priced out of the property market at a time when President Ma Ying-jeou’s (馬英九) government is trying to convince them of the advantages of closer economic integration with China through the service trade pact.
“If mainlanders are in the market, we don’t even have a chance. What if, in the end, those who live in Taiwan aren’t Taiwanese but Chinese?” said Melissa Hu, a 40-year-old public servant in Taipei.
Some property agents said loopholes that allow Chinese buyers to get around restrictions make it difficult for Taiwan to take meaningful action.
“It’s impossible for the Taiwan government to fix it. The best it can do is to set up a limit on how many houses Chinese can buy each year,” said Stanley Su, research and development manager at Sinyi Realty Co in Taipei. “That way, it can at least avoid a situation where massive inflows of Chinese investment go to Taiwan’s property market.”
Money from China has helped drive home prices in Taipei up almost 200 percent in the past decade, according to property agents.
Taiwan imposes strict rules on Chinese home buyers, including restrictions on quick re-sales and background checks to exclude people with links to the Chinese Communist Party and People’s Liberation Army.
However, many Chinese investors have found ways around those barriers, usually by buying homes through Taiwanese business partners or using overseas investment schemes to mask their activity, agents and industry watchers said.
While the number of individual Chinese buyers is small — Taiwan allows only 400 apartments to be sold to Chinese each year — it is clear that more Chinese capital is flowing in.
Government figures show Chinese have bought 160 properties valued at NT$2.3 billion (US$76.6 million) since Taiwan allowed Chinese capital to invest in real estate in 2002. However, many industry watchers and agents say that those numbers are under-reported.
In just one transaction two years ago, a Taipei-based real-estate attorney said he helped a Chinese state-owned steel company buy land worth NT$580 million under the name of a Taiwanese shareholder.
The deal, concluded in Hong Kong, was recorded as a domestic transaction and surpassed the NT$530 million in Chinese property investment reported by the government from 2002 to 2011.