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Monday, April 7, 2008

Taiwan real estate market set to boom: Analysts

TAIPEI: The property market in Taiwan is set for a boom if president-elect Ma Ying-jeou can improve relations with mainland China and stimulate the island's sluggish economy, analysts say.

Market-watchers expect a rise of 20 per cent or more by the end of 2008 if Ma keeps his pledge to liberalise economic exchanges with China - and some say there are already signs of soaring prices since his election last month.

"Luxury residential property prices in certain districts of Taipei jumped one-third right after Ma's victory," said Chang Hsin-ming, a marketing consultant with US-based ERA Real Estate.

He said site visits by potential homebuyers were up 30-40 per cent in recent weeks, with many believing that the tense political rivalry with China will ease under Ma's leadership.

Ma, who takes office on May 20, campaigned on a vow to help create a "commom market" with China across the Strait, improving trade and tourism by lifting barriers to the free flow of goods and people between Taiwan and the mainland.

Since the early 1990s, Taiwanese investors have channelled an estimated US$150 billion (US$1 = RM3.19) to China, which has become the island's largest trading partner and biggest export market.

Doing away with trade barriers would increase the flow of money in the other direction, and allow Taiwan to take better advantage of the vast new wealth being created in China today, say analysts.

A survey by North Rehouse, a Taipei property firm, found that 67 per cent of mainland investors were willing to buy real estate in Taiwan once restrictions are eased - and predicted prices would go up 30-50 per cent by year's end.

Despite the decades of official hostility, there are many Taiwanese based on the mainland - and they will also be looking to channel funds back to the island, Chang said.

"A more relaxed China policy will encourage Taiwan investors on the mainland to repatriate their profits back home without controls," he said.

"Such fund inflows, no doubt, will benefit the local property market."

Andrew Liu, managing director for real estate firm Colliers International Taiwan, said he was "cautiously optimistic" about the outlook for the local market - particularly for commercial property.

"Taking expanded cross-Strait economic exchanges into account, rental in Taipei office spaces may rise some 10 per cent a year by 2011," he said, up from previous industry estimates of a 5-7 per cent annual increase.


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