PRIVATE landowners are expected to start co-operating with developers building mass market housing in Taiwan as real estate firms chase slim profits and the property market languishes in the doldrums, a senior government official said. Wu Ching-hui, senior planner with the Council for Economic Planning and Development, a government advisory body, said he expected up to 10,000 non-government lots to be released for development in the next few years. His comments followed an announcement by Prince's Housing and Development Corporation, one of Taiwan's major listed developers, that it would build 870 flats for workers on a 8.47-hectare site in the southern city of Tainan. The project is in line with President Lee Teng-hui's policy of providing housing for workers at NT$60,000 (about HK$16,800) per ping (one ping is equivalent to about 35 square feet equating to a price of about HK$480 per sq ft). To be completed in 1998, the project will cost around NT$1,142 per sq ft to develop. It will be a joint venture between Prince's and Taiwan Sugar Corporation which will provide the land. Mr Wu said the project would trigger many more such deals. Although the council anticipated that there would be 10,000 lots that could be developed for this purpose, Mr Wu said 'it would already be very good if we can build flats on up to 7,000 lots'. He said the 7,000 lots located at the outskirts of the island's cities would represent a total of about 700 ha. Plagued with a glut of 500,000 empty flats and a property slump that is showing no signs of a recovery in the short term, property developers in Taiwan are trying to maintain growth. Huang Pei-kuei, deputy general manager in charge of development at Prince's Tainan office said the company was expecting a 5 per cent profit on the housing project. 'To be able to earn a profit during a slump is already good enough,' he said. Wendy Hsueh Huei-jen, manager at C. Y. Leung & Co in Taipei, said developers would consider themselves lucky if they managed to make sales in such unfavourable market conditions. She said sales would move quicker for less expensive flats like the ones Prince's would be building in Tainan. By co-operating with Taiwan Sugar she said the developer would be saving a lot on land cost. 'If they had to buy land for such a big project, it would cost them quite a bit.' Taiwan Sugar has also set aside a further seven sites representing a total of 46 ha for building 4,600 flats for workers at the cost of less than $1,142 per sq ft. The locations include Taichung and Changhua in the central region, Kaohsiung in the south, and Hualien in the east. Mr Wu said such projects would boost the credibility of developers who had commonly been identified with land speculation. They also set a benchmark price for flat-buyers and landowners, he said. But he said such team-ups between landowners and property developers had met with strong opposition from construction companies which felt their interests threatened. Mr Wu said construction companies without land would not feel the pinch because land prices generally would be lower. The construction industry brands low-income housing projects as high-risk because with a low projected profit margin, any surges in raw materials costs and/or shortages would soon affect profitability. There has been talk of converting some empty flats to public housing with plans to price them at two-thirds less than flats built by the private sector. Affordability remains a key factor. While the oversupply remains, substantial demand will exist for public housing. According to the the interior ministry 160,000 households were still waiting to buy flats under the public housing scheme. The council said the preliminary plan for 1997 was to build a total of 48,510 flats under the public housing scheme, 5,300 units less than what has been proposed by the ministry. The preliminary plan will be confirmed soon. Meanwhile, Mr Wu said amendments in the laws to allow foreign investors to buy land and invest in real estate were likely to be made this year.