Thu, Aug 14, 2014 - Page 3 News List

FEATURE: Chinese buying local real-estate riles Taiwanese upset over rising prices

SKIRTING THE RULES:Chinese investors are reportedly buying homes through local business partners or using overseas investment schemes to conceal their activity

By Yimou Lee and Faith Hung  /  Reuters, TAIPEI

“Transactions under the table would be at least 10 times more than what we see on the table,” said the attorney, who declined to be identified due to the sensitivity of the matter.

“Most mainland investments detour through somewhere else in order to enter Taiwan, which is quite mysterious and makes it hard to trace where those overseas companies are really from,” said Erin Ting, senior research manager at property consultancy Savills.

Some places where Chinese investors set up overseas subsidiaries before entering Taiwan include Hong Kong, Singapore and the British Virgin Islands (BVI), some agents said.

“The government only looks at the very last door of the money flows,” Ting said. “It’s likely that many are from mainland China, but it’s all under the table so no one would say it out loud.”

Wu Zhongxian, commercial property assistant manager at property agency H&B Business Group, said Chinese investors were eyeing hotels and retail shops in popular tourist areas as Taiwan allowed more individual Chinese tourists to visit.

“It takes them 1.5 to two years if they follow government rules,” Wu said. “So they buy via BVI firms or through a particular person in the company.”

Beijing-based developer Vantone Real Estate, the first Chinese developer to enter Taiwan’s market in 2011 by setting up an associate company in Singapore, said 40 percent of its 294 high-end apartments in Taipei had been sold to Chinese buyers by last month.

“Many Chinese clients are longing for Taiwan,” said Kidd Lin, sales manager at Vantone International Development Ltd. “Taiwan offers a lifestyle that the Chinese middle class are most looking forward to.”

Many Chinese are attracted to Taiwan thanks to a similar language and culture.

Vantone’s large, high-end apartments just 30 minutes from the center of Taipei sell for between NT$30 million and NT$100 million.

Other Chinese developers, including Fujian-based Yuzhou Properties, are planning to follow Vantone into the Taiwanese market.

However, Vantone’s Taipei project — the first large-scale home sales to Chinese — may be subject to strict government scrutiny and it remains to be seen how many apartment sales will be approved to Chinese as local elections approach, several industry watchers said.

“It’s sensitive timing. We want to stay low-key,” said Lana Xie, founder of a real-estate agency in Beijing that targets individual Chinese buyers for Taiwanese residential property.

Xie said transactions had doubled in the first half of this year, with most Chinese buyers chasing “holiday homes” in southern Taiwanese cities.

“It’s really not easy for Chinese to buy a property in Taiwan,” Xie said.

“That’s why owning a Taiwan house is really something Chinese can show off to everyone,” she said.

Additional reporting by James Zhang and Clare Jim

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