As confidence returns to real estate, Taiwan must take steps to ensure its real estate market champions transparency and security and remains a thriving destination for global investment.
In the recently published 2017 Taiwan White Paper, the Real Estate Committee of the American Chamber of Commerce in Taipei commends the Taiwan government for recent efforts to improve the real estate market and the urban landscape. The revised Urban Renewal Act and amended Real Estate Transaction Declaration have improved market transparency and fairness for investors and homebuyers.
While acknowledging the progress already achieved, however, the Real Estate Committee highlights key areas in which further improvement is needed and recommends steps the Taiwan government take to help the real estate market achieve its full potential. The Committee’s position paper emphasizes that high market transparency and security are crucial to attracting investment.
One suggestion the Real Estate Committee proposes is to simplify the urban renewal process to ensure housing safety and quality. Major metropolitan areas suffer from extreme scarcity of available land for new building construction due to Taiwan’s small size and dense population, and much of the existing housing stock is old and possibly unsafe. The Committee’s position paper notes that over 44% of Taiwan’s housing stock (3.8 million residential units) is over 30 years old, and in Taipei City, Taiwan’s most densely populated urban area, the average age of housing is 32.3 years old.
Older, deteriorating structures suffer from deteriorating capability to withstand Taiwan’s extreme weather conditions and natural disasters and negatively impact the aesthetics of the urban landscape. Moreover, as this building stock consists mainly of low-rise structures, the urban landscape is underutilized. As such, urban renewal of Taiwan’s older, deteriorating structures is vital to ensuring housing safety and quality, as well as bringing Taiwan’s real estate market in line with modern global standards.
The Committee advocates for empowering courts to actively assist property owners in areas zoned for urban renewal to achieve resolutions to urban renewal issues. Particularly in cases of critically deteriorated buildings, it is imperative that courts be able to take action to facilitate compulsory execution and property expropriation.
In addition to urging all levels of government to recognize the critical urgency of urban renewal and accelerate efforts to streamline and simplify the approval process and relevant regulations, the Real Estate Committee also recommends a comprehensive building inspection program across Taiwan “to identify severely deteriorated buildings and prioritize redevelopment applications for those structures.”
To increase investment opportunity in the Taiwan real estate market and promote long-term growth and stability, the Committee also recommends equalizing property taxation for domestic and foreign property owners and relaxing restrictions on overseas property investment by Taiwanese insurers.
To read the full Real Estate position paper, click here.