Government wrestles with real estate speculation
Premier Wu Den-yih said during an interpellation session at the Legislative Yuan March 9 that bringing soaring house prices under control is a top priority for the current administration.
The premier made his remarks in response to a comment from Kuomintang Legislator Lo Ming-tsai, who voiced his concern that the signing of an economic cooperation framework agreement between Taipei and Beijing might rekindle speculation in Taiwan’s real estate and stock markets.
Wu pointed out that price surges are not a universal phenomenon across the island, with metropolitan Taipei being the only area where real estate prices are extraordinarily high. House prices in Taichung and Kaohsiung remain stable or even low, he noted.
Referring to the recent measures unveiled by the Central Bank of the Republic of China, the Financial Supervisory Commission and the Ministry of Finance, the premier said the government does not welcome speculation to rein in real estate prices.
In light of the hard lessons from the U.S. subprime mortgage crisis, the government will pay more attention to unusual flows of funds in and out of the country, Wu said. Efforts will be made to deter these funds from engaging in speculation, and to guide them toward better investment venues that can promote job creation on the island, he added.
Excessive liquidity amid a scarce supply of real estate properties is driving up house prices, Wu pointed out. The solution to the predicament is to increase supply through land appropriation and development projects along mass rapid transit systems.
The government will come up with a more balanced policy regarding real estate development to increase the supply of houses, he said. “This is what the government should strive to do.”
Price increases are an inevitable trend in the long run given the scarce supply of land amid high demand. The government’s recent decision to suspend further auctioning of public land in Taipei’s prime locations can only hold off further speculation for a while. The long-term approach should be to increase supply to meet demand, he said. (SFC-HZW)
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