The China Post news staff
In anticipation of a business boom resulting from a perceived government readiness to let in more big-spending mainland Chinese tourists, investors, and even the average citizen, are scrambling for a piece of the action, hiking up prices and the competition for pricey shop fronts.
Meanwhile, developers, eying an influx of capital from mainland China and other countries, are in a rush to build more office buildings and hotels.
Statistics compiled by real estate brokers show a 270-percent increase — an eight-month high — in the buying and selling of shop fronts in February over January. An analyst attributed the enthusiasm to the government’s policy vis-a-vis mainland China. “A possible investment protection agreement between the two sides and the government’s readiness to allow in more mainland Chinese individual tourists” are the two main incentives, said Cheng Chao-ho (鄭朝鶴), shop front business manager with Yung-Ching Realty Group (永慶房屋). The luxury tax introduced by the government last year to rein in speculation on real estate also explained the shift of investor interest from residential apartments to shop fronts, according to Cheng.
The resulting depression in the market for luxury residential apartments is forcing people who want to acquire these high-end properties to look for greener pastures elsewhere, Cheng said.
The “explosion of interest” came after the presidential election in January, when people, including those who deserted the apartment market in favor of shop fronts, enlivened the market with their “unreserved” bidding, Cheng said, adding people who previously held a wait-and-see attitude are no longer hesitant.
Shop fronts favored by investors are those found in areas where mainland visitors are more visible, said Cheng.
Shop fronts most sought after by investors are those located in and around those “must-see” tourists attractions in Taipei, such as Ximending, Shilin Night Market, Yongkang Street, Tonghua Street and the shopping areas around the National Dr. Sun Yat-sen Memorial Hall. Some of these shop fronts are priced at NT$100 million or above apiece, said Cheng, but those in high demand are shop fronts located where mainland Chinese tourists, even the coach buses carrying them, can see them, Chen said.
Business properties located on the sides of the major MRT routes that traverse the city also command top dollar, Cheng said, adding investors consider them “blue-chip stocks.”
On the other hand, developers are doubling or even tripling their bets on the possible positive effects of an investment protection agreement between Taiwan and mainland China, hoping further deregulation of mainland investment in Taiwan would mean an increased demand for office and factory buildings.
According to a report in the Wednesday, Feb. 28 issue of the Chinese-language United Evening News, several developers, including Farglory Group (遠雄集團), Chong Hong Construction (長虹), and Highwealth Construction (興富發) are upbeat about the prospects of such a development and are poised to launch new projects this year.
Meanwhile, returned overseas Chinese are also active in the real estate market, buying up properties in the city, mostly in the Daan and Zhong Shan districts. According to statistics released by the Ministry of Economic Affairs, investment by returning overseas Chinese in the country last year totaled NT$15.2 billion, a 12-year high.