Mainlanders dodge restrictions on Taiwanese property purchases
Buyers from across the strait are making the most of legal loopholes to purchase flats and drive up Taipei prices by 200pc over the past decade
Mainlanders are skirting rules aimed at limiting their purchases of property in Taiwan, where capital inflows from the mainland are an especially emotive issue.
Some Taiwanese feel priced out of the property market at a time when the government of mainland-friendly Taiwanese President Ma Ying-jeou is trying to convince them of the advantages of closer economic integration with the mainland through a cross-strait trade pact.
"If mainlanders are in the market we don't even have a chance. What if, in the end, those who live in Taiwan aren't Taiwanese but Chinese?" said Melissa Hu, a public servant in Taipei.
The government in Taipei has been criticised by some for not imposing more restrictions on mainland ownership of Taiwanese real estate.
A senior official from the Taiwanese interior ministry, Shih Ming-shih, said that the government had imposed strict measures to prevent mainlanders from buying too many homes because that "would jeopardise our national security or economic development".
"If people do not apply legally, there is no way we can stop that, but they have to bear the risk of losing the properties they bought," Shih said.
Some property agents said loopholes that allow mainland buyers to get around restrictions made it difficult for Taiwan to take meaningful action.
"It's impossible for the Taiwan government to fix it. The best it can do is to set up a limit on how many houses Chinese can buy each year," said Stanley Su, research and development manager at Sinyi Realty in Taipei. "That way, it can at least avoid a situation where massive inflows of Chinese investment go to Taiwan's property market."
Money from the mainland has helped drive home prices in Taipei up almost 200 per cent in the past decade, according to property agents.
Taiwan imposes strict rules on mainland home buyers, including restrictions on quick resales and background checks to exclude people with links to the Communist Party and People's Liberation Army.
But many mainland investors have found ways around those barriers, usually by buying homes through Taiwanese business partners or using overseas investment schemes to mask their activity, agents and industry watchers said.
While the number of individual mainland buyers is small - Taiwan allows only 400 flats to be sold to mainlanders each year - it is clear that more mainland capital is flowing in.
Government figures show mainlanders have bought 160 properties valued at NT$2.3 billion (HK$594.1 million) since Taiwan allowed mainland capital to invest in real estate in 2002.
Many industry watchers and agents say, however, that those numbers are under-reported.
"Transactions under the table would be at least 10 times more than what we see on the table," one lawyer said.