Fools' gold

For the past two or three years, new luxury apartments have been going up in the quiet leafy lanes behind the chaos of Taipei's main boulevards. They are sleek 12-storey buildings with pseudo-European names like 'Le Figaro'.

Typically, each floor of the new buildings is a single unit at least two or three times the size of apartments in the traditional concrete five-storey walkups thrown up in the 1970s and 1980s. And they aren't cheap - you can expect to fork out at least a couple of million US dollars for one of these prestigious residences.

Still, demand is apparently steady, despite Taiwan's supposedly lacklustre economy for much of the first half of the decade. While white-collar workers haven't seen a pay increase in years and university graduates have actually seen starting salaries decrease, Taipei's wealthy upper class has been quietly prospering.

This class of Taiwanese is widely travelled but wants to live in Taipei. This is partly because Taipei is Taiwan's political, financial and cultural capital - a sort of Shanghai and Beijing rolled into one, albeit on a much more human scale. But it is also because Taipei has, in the past decade, developed its own distinctive feel.

The problem is that you have been able to buy a new apartment in gritty Taipei County for a fraction of what an old crumbling concrete cave with plastic chandeliers and fluorescent lights would cost in Taipei City.

Yet, very little new housing was built for decades in Taipei until the municipal and central governments realised they were sitting on a goldmine - the hundreds of decrepit wooden houses in swanky neighbourhoods that were once allocated to civil servants and professors.

As the ageing occupants of these houses have died off or been pushed out, both governments have been selling off the land to developers, who have discovered that there are people willing to pay top dollar to live in new housing in Taipei.

Some of the city's leading intellectuals are now calling for a moratorium on further sales so part of Taipei's heritage can be preserved. Developers argue that this is absurd - most of the buildings date from the 1940s and, with few exceptions, do not have any historical significance.

But they do have significance in a city where almost every trace of even the recent past was erased during Taiwan's boom years. One friend in her mid-40s walked with me through the neighbourhood she grew up in near the university district. She pointed out an old Japanese house as the only building left that she could recognise from her childhood.

It too was surrounded by a green wall of corrugated metal, ready to be torn down and replaced with yet another monument to European yearnings, the '16th arrondissement in Taipei'.