Housing prices in Taiwan's 'Silicon Valley' to set record

The local real estate agency U-trust said since high-tech businesses began booming in the first quarter, home purchases and sales in Hsinchu have reached 7,600 in Q3, up from 7,500 in Q2, which was a 24 percent rise from the previous quarter. Liu Pin-yao, a spokesman of the real estate agency, said he expected the housing trade volume in the technology-based area for the year to not only exceed last year's volume, but also reach an all-time high.

Liu said the housing prices in Jhubei City, a transportation center of Hsinchu County, reached NT$135,000 (US$4,192) per ping (3.305 square meters) in Q2, nearly the same as last year's high of NT$136,000.

The rising year-end bonuses offered by the high-tech companies will help increase homebuying in Hsinchu by the end of the year, he said.

Meanwhile, the real estate market in Hsinchu's neighbor Taoyuan City, also enjoyed growth. The city's newly-developed area around Taoyuan County Arts Park, which will be completed by the end of this year, and the Nankan area, both saw a growth rate of 40 percent for the prices of commercial property in the past two years, he added.

Property prices are also expected to rise in major cities in Taiwan, including Taipei, Taichung and Kaohsiung. Many of the buyers are believed to be speculators who are eying Taiwan markets as good places to invest in property.

They expect the markets to grow after Taiwan signs the proposed economic cooperation framework agreement (ECFA) with China.Some of the buyers or potential buyers are big domestic and overseas investors of properties which have started to look for luxury mansions as investment targets in recent months.

Greg Yeh, chief consultant at Evertrust Rehouse, said they have received many queries about luxury mansions recently and just closed a deal worth over NT$100 million.

Yeh said that based on the experience of Hong Kong's real estate prices, which rose sharply after Hong Kong signed the closer economic partnership arrangement (CEPA) with China in 2003, Taiwan's market prospects are also good.

However, unlike Hong Kong, Taiwan is a democracy and the ruling party Kuomintang, with an eye on keeping the presidency in the 2012 presidential election, is eager to appease public dissatisfaction over the high prices of property, which make it difficult for young couples, single people, or even couples in their 40s or older to afford to buy their own property. Many are living with their parents or parents-in-law.

A recent survey conducted by the government found the unaffordable property prices to be a major complaint of Taiwanese people,prompting Premier Wu Den-yih to announce the central government will make plans to build affordable housing near subway lines.

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