Taiwan Takes Aim at Speculation on Real Estate

Taiwan is cracking down on real estate speculators to head off a resurgence of the frenzied speculation that sent prices soaring--and then crashing--in the past few years, banking and government officials said Friday.

The Interior Ministry is revising land utilization rules under which it will raise annual land taxes to check speculation by big corporations, a ministry spokesman said.

Central bank officials asked commercial banks this month to screen loans to businessmen strictly to prevent money going to real estate speculation, a central bank official said.

“We don’t want to see the property market overheating again because it would do more harm than good to our economic development,” the official said.

Real estate prices and rents in major Taiwanese cities soared by 200% to 300% between 1987 and 1989, partly because of a huge flow of “hot money” into real estate from the booming stock market and domestic economy. The speculative bubble burst last year as the stock market crashed and the economy slowed. Housing prices and office rents have plunged between 20% and 30% since early last year.