Gov't adds supply to chill land speculation

Premier Wu Den-yi said in an interview that the government will no longer sell out larger state-owned land lots, a move that had helped fan the speculation on the real estate market and drive housing prices even higher.

Wu pointed out that the problems of soaring property prices exist mainly in only the Greater Taipei area and northern Taoyuan County while the realty markets in other regions remain at a low ebb.

Sweeping financial or taxation measures will not help bring down the prices in northern Taiwan but will adversely smother the markets in the central and southern parts of the island, he explained.

The new measures to rein in the runaway housing prices in the north will include using the rezoning rules of the urban renewal law to build new apartments in cooperation with construction and real estate development companies on government-owned land lots along the mass rapid transport (MRT) routes or near airports, he said.

Wu said he has given instructions not to sell state land exceeding the size of 500 ping (one ping equals to 36 square feet).

The government's past policy of allowing realty developers to outbid each other to purchase public land and then sharply mark up selling prices of finished apartments has forced more people to move out from capital Taipei.

The high prices also ignited new round of price rises and created artificial demand from realty speculators that has lifted the prices out of the reach of most wage earners.

To dampen the sizzling speculative activities, officials at the Central Bank of the Republic of China (CBC) recently advised state-run banks to tighten lending risk management, especially when offering easy loans to speculators who snap up luxury housing units and push up the property prices.

Other officials talked about plans of revising the tax system concerning real estate, including levying the capital gains tax based on market transaction prices instead of on the basis of government-appraised prices, which are lower than actual market prices.

Responding to lawmakers' questions yesterday, CBC Governor Perng Fai-nan said he agreed with the latest policy pronounced by Premier Wu because the speculative realty investments are now confined to certain regions.

Vice Finance Minister Hsu Chih-jian said the Ministry of Finance is working on a plan to release 8,000 hectares of government land in urban areas to build low-cost apartments for young people in cooperation with construction firms in the private sector.

Executives at some construction companies said they back the plan because the government intervention will at least help them get the needed land, which had been usually gobbled up only by huge conglomerates in the past.

Yet some real estate development firms said the new policy will still be unable to meet the strong demand for housing units in northern Taiwan.

The long-term solution still lies in the accelerated construction and expansion of public transport networks that can fulfill the needs of people living in districts where the apartment prices remain at relatively low levels at around NT$100,000 per ping, compared with as much as over NT$500,000 for new apartments in Taipei City, they said.

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