The China Post news staff
The China Post news staff–The prices for top luxurious housing units in Taipei are reportedly spiraling to a new high of over NT$3 million per ping (one ping = 36 square feet), fueled by the rising costs of building materials and a growing spree among buyers to invest in value-sustaining properties, according to market sources.
The said housing units, located on Xinyi Road, Section 3 and opposite the Daan Forestry Park, are reportedly selling for NT$3.04 million per ping, with a housing unit alone costing NT$1 billion.
Another housing project in Taipei, to be launched by Kindom Construction Group, is also reportedly up for sale at an even higher unit price of NT$3.8 million per ping.
Market insiders said that the recent hikes on oil prices and power rates have caused the prices for steel bars, premixed concrete and cement to surge significantly. This, coupled with the inflation-induced effect of pursuing value-sustaining products, has served to push up realty market prices, especially in central and southern Taiwan.
Over the past five years the cost of building materials has shot up 30 percent, and the land cost has almost doubled in southern Taiwan, a spokesman of a listed construction firm said. With a goal of reflecting the increased cost, the housing prices in the southern port city of Kaohsiung should be raised by at least 10 percent per ping.
But some construction firms would rather take a wait-and-see attitude instead of rapidly raising their sales prices, lest they should trigger bad impression by social public and potential buyers. Accordingly, the time is yet to come for an across-the-board rise in housing prices, especially given the fact that the government has yet to let up its efforts to dampen the abnormal surge in housing prices. Meanwhile, institutional investors said that building materials account for only a limited share of the overall construction costs, and it is land plots that command the lion’s share of the costs.
Accordingly, only if land prices are pushed up by the inflation effect can construction firms smoothly raise their sales prices to reflect the increased land costs, otherwise, it would be difficult to raise housing prices across the board at a time when the entire local realty market has yet to fully recover.
In related news, Perng Fai-nan, governor of the Central Bank of China (CBC), has proposed that the bank should closely monitor the fluctuation of housing prices, due to its effect on the prices of daily-life commodities. The CBC is also keeping a close watch on extension of housing loans by financial institutions, asking the latter to report the status of such loans every other week.
Perng noted that housing price hikes may foster anticipation for general price hikes among local people. Presently, the CBC is watching closely the status of housing-loan extensions in Greater Taipei. Loans for the purchase of second homes in the region cannot exceed 60 percent of the housing value. Developers also cannot obtain secured loans exceeding 65 percent of the market value of their land.