Taipei housing prices still on the rise

Chang added that government initiatives to curb speculation and keep housing prices down so that average citizens can afford to own their own homes could also put a damper on the market.

Tsai Hsung-hsiung, chairman of the Cabinet-level Council for Economic Planning and Development (CEPD), said earlier this month at a legislative session that the government is considering an overhaul of property-related taxes, including levying a capital gains tax based on actual market transaction prices and increasing taxes on apartmentsthat are not lived in to stampout real estate speculation.

In an effort to avoid a real estate bubble, Perng Fai-nan, the governor of the Central Bank of the Republic of China (Taiwan) , has instructed state-run banks to tighten lending risk management and cautioned them against the overheated property market in some areas.

But Perng denied he is mulling raising interest rates or using other monetary tools at his disposal to help drive down housing prices.

Finance Minister Lee Sush-der also said banks should tighten lending on luxury homes, which he classified as housing units commanding prices exceeding NT$50 million.

That proposal spooked the market, forcing Premier Wu Den-yih to say later that the government will not consider levying higher taxes on upscale properties unless the economy and the well-being of the general public improves markedly.

Instead, the government will seek other strategies to counter the high cost of housing in Taipei, such as urbanization and rezoning, to increase the supply of construction land in urban areas.

Wu recently suggested at a Cabinet meeting that the government build 5,000-6,000 cheap or mid priced houses for young or first-time buyers close to stations on the future Mass Rapid Transit line linking Taipei and Taiwan Taoyuan International Airport.

Regardless of what measures the government adopts, NCCU's Chang estimated that those policies and oversupply in the market could send housing prices in Taipei down 10 percent to 20 percent next year.

Property developers,however,will continue to lobby the authorities not to make any moves to restrain price growth.

Lai Cheng-i,chairman of the Council for Industrialand Commercial Development (CICD) and president of property developer Shining Group, told Wu at a luncheon earlier in the month that measures to restrain rising prices in Taiwan's property market are not necessary and urged him to stick to market mechanisms.

“Property in Taiwan is still attractively priced compared to that in Hong Kong and other Asian cities,” Lai said.

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