Taiwan’s government acts to curb skyrocketing housing prices
March 05, 2010 - Taiwan
Responding to mounting calls for the Taiwanese government to stop fuelling real estate prices, Premier Wu Den-yi has agreed to suspend sales of state-owned prime city land, particularly in Taipei.
The sale of a state-owned land parcel in downtown Taipei for the second-highest price on record to a private developer last week following the auction of two other state land lots at similarly exorbitant prices in January has drawn public concern about property speculation.
Fielding questions from opposition Democratic Progressive Party Legislator Tsai Hung-liang about skyrocketing housing prices, which has become a top public grievance, Wu said he fully understands that housing prices in metropolitan Taipei have reached an intolerable level.
"Therefore, I have instructed the National Property Administration (NPA) to suspend open tenders for state-owned prime city land in Taipei," he said, adding he will also ask the agency to demarcate Taipei´s prime areas.
Tsai said the whole of Taipei should be defined as prime land because housing prices have surged past NT$400,000 (US$12,500) or even NT$500,000 per ping (3.3 square meters) in the city´s suburban Muzha district, not to mention even more astronomical prices for downtown areas.
According to a United Daily News front-page report, Taipei City´s population has been on the decline for 13 months because of the city´s soaring housing prices.
Over the past year, the report said, Taipei City has seen its population decrease by nearly 20,000 people, while the population of neighbouring Taipei County, where housing prices are much cheaper, has increased by 39,000.
Quoting statistics compiled by a major local real estate Internet portal, the report said housing prices in Taipei City have reaches an average of NT$430,000 per ping, double the Taipei County average and five times more than the average in southern Taiwan´s Kaohsiung City (below).
The report further said that even though the Executive Yuan has prohibited the sale of state-owned land lots larger than 500 pings, the NPA sold off 232 hectares of public land parcels last year alone, nine times the size of Daan Forest Park in downtown Taipei.
Acting on Wu´s instructions, the NPA under the Ministry of Finance announced later in the day that open tenders for a batch of public land lots scheduled for March 11 will be suspended.
Among the land parcels originally to be auctioned off in the March 11 tender is a 210-ping plot on an alley near the upscale Xinyi district, with a floor price of NT$356 million.
Noting that the sale of state-owned land is a major public issue, NPA Director Chang Pei-chih said his agency will abide by government policy. "The NPA will suspend open tenders for state-owned prime land lots in Taipei City in line with Premier Wu´s directive," Chang said, adding that the agency will consult with the Finance Ministry about the definition of "prime land" before unveiling how it will execute the new policy.
Finance Minister Lee Sush-teh said rising housing prices in metropolitan Taipei is more the result of market mechanisms than of speculation. "The government is unlikely to intentionally fuel real
estate prices through sales of public land, " Lee said, adding that the NPA has sold only small land parcels through the open market mechanism.
Nevertheless, he acknowledged that the government might need to adjust its land policy or development strategy after some special land parcels have fetched high prices through normal market operations.
Taipei, real estate prices, land parcel, property speculation, housing prices