Farglory winning bids for lots show declining prices

The China Post news staff

The winning bids for two lots of land around the proposed MRT Xinzhuang Fuduxin Station show the arresting effect of a proposed tax on the growth of land prices, said realty brokers.

The two bids, placed by two Farglory Group subsidiaries, one a life insurance company, and other a land developer, yesterday won the group two tender lots for a total price tag of NT$12.2 billion. The average per ping price of the two lots is NT1.78 million, somewhat less than the winning bids for similar lots in the same area last September, said a real estate broker, calling it a harbinger of what is to come in the next half of the year in the real estate market. More than a dozen life insurance companies and developers, seeking to take advantage of a market reeling from negative developments, had submitted bids for the tender lots. Their offers were described as “conservative.” Developers have adopted a wait-and-see attitude and transactions have declined since the government proposed a luxury tax in an attempt to curb speculation on real estate, said a broker with Yungching Housing. Even the tender to auction off the so-called “most expensive vegetable garden” in Taipei’s Xinyi District was aborted with no winning bid, said the broker. Lot 444, another tract of land adjacent to the proposed MRT Xinzhuang Fuduxin Station was sold for a per ping price of more than NT$2.3 million last September, while Lot 304 went for a per ping price of NT$2.2 million last year. However, the fact that Farglory has scooped up the bargains without paying too much shows the effect of the luxury tax bill, the broker concluded.

The enthusiasm among developers and insurance for the two lots, however, shows the general market is optimistic about the area’s future development, said another broker.

Both lots, intended for commercial use, have a combined area of around 8,000 ping. The plot ratio for both tracts is 440 percent, much higher than the neighboring lots.