It is fact not fiction. The price of one chia (about 0.97 hectare) of farmland in Pate rose from around NT$1,300,000 three years ago, to NT$180,000,000 per chia for farmland near the local government offices by the beginning of this year--a 140-fold increase in value, which makes this one of the strangest chapters in the saga of Taiwan land prices over recent years.

Hard Trading in a Dream: Pate is about 5km from Taoyuan city and has a population of only 130,000. Half of the town's land is still farmland. In March this year reports came out in the press that a station for the high-speed railroad was to be built in Pate; the bombshell caused land prices to treble in one day. Buyers rushed in and sellers held out but in the end it turned out that all were chasing a golden dream.

At the rumored site of the new station, near the local-government offices, a seven-story apartment block is under construction at the end of Chungshan St. At the beginning of the year there was such a lack of interest in advance sales that subsidies were being requested; then, on the second day after the railway news broke, all forty apartments were sold in two days. In addition, the price leapt from its normal level of NT$80,000 per ping to NT$110,000 per ping. "The cost of advertising was saved" says Liu Ai-sheng, a reporter for the United Daily News and resident of Pate.

While outsiders considered this to be "news," a Pate taxi driver sneered, "with people selling 150 apartments in two hours without a word, what's so great about two days!"

Tsai Cheng-lin, the managing director of a property company, still remembers the unprecedented festivities on March 29 at the Pate apartments near the local government offices: "You could not even get hold of the usual price lists that are prepared by construction companies for sales. A hundred and fifty apartments were sold on the spot."

Since March, condominiums have been planned on fifteen lots of more than 200 pings (坪) in Pate. "All the units were sold out in just two weeks" says Chien Chu-fu, the manager of a realestate shop in Pate's busiest street. "There was not one exception."

News From Nowhere?: At this time, expensive foreign cars often came into the village, disgorging smart outsiders who would then proceed to carve up the green fields on the maps they clutched.

In such an atmosphere, building land near the proposed station rose from around NT$100,000 per ping to NT$150,000-160,000 within a few days and farmland rose from NT$10,000 to NT$80,000, Lin Hsueh-cheng of the Tanan section of the Pate farmers association takes out a map of Pate and points to the outlying farmland, saying: "You can even trade these pieces of land for thirty or forty thousand dollars!" But because some farmers held out, not wanting to kill the goose that lays the golden eggs, some people feel that not much land actually changed hands. However, Tsai Cheng-lin claims to have personally dealt with more than a few cases within l00 hectares of the proposed station in which financial groups had used the names of individuals to buy land, "You can point to at least one-half," he says.

Some people describe how the rumored station must be a winner because, if it was cited here, then the rapid transport system would favor it. Also, the Ministry of the Interior had already decided to develop a new town here. It is not surprising that many people hoped to rise to riches on the good news.

But if you asked the local people, "Is the station really going to be built here? How do you know?" those in the know would say that examining the Railroad Department's map shows that Pate is where three lines meet, and that it was already staked out. But most of the townspeople would answer: "How do we know? Didn't the newspapers say so?" Pate local government worker Hsu Shih-chang exclaims, "Heck, doesn't everyone go by what the papers say!"

Yet, sure enough, on the map of every government department the high-speed railway, the rapid system and the new town are only "possibly sited in Pate." At the beginning of June the bad news broke--the railway was being developed along the coastal route and the Taoyuan station was to be located in Tayuan.

The Pivot of Taoyuan: Pate's property and land prices are still stuck at their high levels, nobody is willing to drop; yet to hold them where they are is like trying to walk on air. "At present there are prices but no market" says one Pate resident, as real-estate transactions erode prices. Yet advance property sales cannot stop without protests from customers who have already made their commitments. All that the construction companies can do is to offer compensation in such shapes as fitted bathrooms in the hope that there will still be customers at the door.

"The station at Tayuan is still only at the planning stage. There are still those diehards who are betting that it will come back," says Lin Hsueh-cheng.

In fact, looking at the overall environment, the conditions for a rise in Pate land are basically there. Property and land were already on the up three years ago and the news about the proposed station was only the icing on the cake.

In 1987, the winds of speculation from Taipei and Kaohsiung "blew into Taoyuan," says Chien Chu-fu, and Pate led the way. It is well situated as a pivotal node at the centre of Taoyuan county and with Taipei brimming over and enterprises moving to Taoyuan, Pate is also rising on the tide.

Prices Are Driven by Rumor: In 1988, the real-estate market was stirred up even more by the plan for the second northern express to pass from Luchu through the local system for Pate and Taoyuan city to link up with the Sun Yatsen Expressway. Within two years the number of estate agents in Pate had risen to thirty and many purchasers came from outside the area. "About three in five investors were from Taipei, Taoyuan and other cities and counties," estimates Chien Chufu, whose real-estate company has already had a foothold in Pate for two years.

Unfortunately, life's snakes always seem to outnumber its ladders. In the month following the disappointment of the railroad station, the problem of acquiring land for the local route threatened to hold up the progress of the second northern express and the government decided to suspend the project and put all its energies into finishing the main route to save time. As far as Pate's efforts to hold up prices were concerned, this was just one more straw on the camel's back.

However, aside from the disappointed, there were also some happy families. Out of the more than l00 people who have had land acquired for the Paote local route, at present only half have received their compensation. Because Pate's prices have been driven so high, the amount of compensation they received was worked out according to last year's levels; with the additional factor of the expressway being a closed through-road, they received four tenths. But with farmland estimated at no more than around NT$9,000 per ping, "The compensation is basically not enough now to buy the land near Pate," points out Lin Hsueh-sheng, who has already had his farmland purchased. As far as those who are unwilling to part with their property are concerneds, they are happy to wait for another day.

Even more than the feelings of the people of Pate, simmering away beneath the surface are the prices of Pate real estate. When the decision of where to put the railroad station is finally settled at the end of September, "the bear market will certainly appear," says Tsai Cheng-lin.

It seems just like a balloon carried high by the wind only to be left stuck in mid-air when the breeze slackens, then briefly buffeted before the inevitable descent; what is so strange is that property prices can be this fragile--tossed around so easily by the hot air of groundless rumors.

[Picture Caption]

With farmland making up half of Pate's territory, every inch is gold inthe eyes of speculators.

As Pate land values rise, up go the projects of the construction companies.

Will the heavenly garden still be attractive without its high-speed railroad?

As Pate land values rise, up go the projects of the construction companies.

Will the heavenly garden still be attractive without its high-speed railroad?