The apartment complex that could finally lure mainland Chinese buyers to Taiwan is on a mountainside north of Taipei, up a winding road through a lush forest, past the colourful if careworn local high street, and just uphill from a small but ornate Taoist temple.

The project is the first in Taiwan backed by a Chinese developer and the first to be marketed heavily to mainland buyers. The developers hope it will shake up Taiwan’s high-end property market, which is focused on urban apartments and geared almost entirely to domestic buyers.

The developer, Feng Lun, chairman of China’s Vantone Holdings, is a frequent visitor to Taiwan, whose verdant mountain scenery and unpolluted wilderness areas often surprise those who associate the subtropical island with just its famous electronics industry. He had been scouting for land in a small town at the base of the mountain when he got the idea to build on top of it instead.

“He called me and said, ‘Have you seen the mountain? Are there any projects there?’” said Tony Chao, managing director of Jones Lang LaSalle in Taipei, who put Feng together with the site’s owner.

The result is Vantone Taipei 2011. The two towers are still under construction, but the view from a neighbouring building rivals the one from the top of Taipei 101, the skyscraper that was once the world’s tallest building – though the asking price of up to T$120m (£2.6m) per flat makes them far more exclusive than the Taipei 101 viewing deck (T$450 per adult ticket).

Vantone and its local partner, Southern Land, are not alone in hoping buyers from the mainland will spur on Taiwan’s local market, where the volume of transactions is down 27.5 per cent so far this year.

A Hong Kong businessman opened the Taipei branch of Sotheby’s Realty earlier this year in what YC Lam, the branch’s deputy director, describes as “a China play”.

Political tensions between China and Taiwan mean Chinese buyers have historically been shut out from Taiwan, which is otherwise open to foreign buyers. But in the past few years those tensions have fallen and developers are starting to plan for the day that mainland buyers will have the same impact on Taiwan’s property prices as they have had in Hong Kong, Singapore and elsewhere.

“This is the only market that they cannot reach, that they cannot tap into yet,” says Lam.

For now, though, that demand is blocked by the so-called 5-4-3 problem, a set of restrictions unique to Chinese buyers. Five, because mainland buyers in Taiwan can get a mortgage worth only 50 per cent of a property. Four, because they are generally allowed to remain in Taiwan only four months of the year, even if they manage the difficult feat of getting permission to buy. Three, because the buyers must wait that many years before reselling the property.

The high price of urban property is already a political flashpoint in Taiwan, where real wages have barely grown in recent years. To rein in local investors, the government last year imposed a tax of 15 per cent of the sale price on those who resell properties within a year of purchase.

Elsewhere in Asia, speculation by mainland buyers has been the concern. Governments in places such as Singapore and Hong Kong have tightened regulations and, in Singapore, raised stamp duties in response to popular anger that such buyers were driving up the cost of housing for locals. Nevertheless, Taiwan’s developers and brokers are optimistic their own rules will be loosened. The links between China and Taiwan have grown in the past few years, largely because Ma Ying-jeou, Taiwan’s president, sees better cross-strait relations as an economic opportunity for his country.

A few years ago, Chinese could hardly visit Taiwan and regular direct flights across the strait did not exist. Now, hundreds of such flights take off each week, and rising Chinese tourism is one of the few bright spots in Taiwan’s weak economy. For now, overcoming those barriers is difficult but not impossible.

Fewer than 75 mainland Chinese buyers have been approved so far out of more than 200 applicants, according to government figures, although brokers say more would have been able to buy property if they had had dual citizenship and had made the purchase using that passport. Mainland citizens with businesses registered in Taiwan or who are employed there can also buy property.

It’s that rocky landscape that Vantone and Southern Land are venturing into.

Taiwan is far from the only location Vantone has picked recently. In 2009, the Chinese developer became the first commercial tenant in Manhattan’s rebuilt World Trade Center, where it plans to build a multifloor “China Center” for Chinese companies in the US.

Vantone is able to invest in Taiwan because the project is technically a joint venture with Southern Land, says Larry Yang, an executive at Southern Land overseeing Vantone Taipei 2011. Vantone holds a 29 per cent stake in the enterprise, which the two developers formed in Singapore.

To one side of the towers are Taipei 101 and the curves of the broad Tamsui river as it cuts through the capital. Looking the other way are the harbour towns of Tamsui and Bali and, past them, the sea. All around are tree-covered mountains, some dotted with small farms and older homesteads, some untouched and part of the protected Yangmingshan National Park.

That project and a neighbouring tower named Ellipse, another Southern Land development with glass exterior walls to maximise the view, are the largest luxury projects under development in Taiwan outside of downtown Taipei. Apartments in Vantone Taipei 2011 range from T$20m to T$120m, while those of Ellipse average T$256m.

The developments are unusual not just because they are luxury projects outside the city but because, with the project already 60 per cent presold, local Taiwanese make up a minority of buyers, says Yang.

The rest are from Hong Kong, Singapore, China, as well as some Taiwanese businessmen known as taishang, who made their money working in the mainland.

Typically, foreign buyers, especially US and Europeans, are small players in the Taiwanese market. Taipei cannot compete with the region’s business hubs, which attract far more foreign residents.

Limited local demand for second homes means few high-end residences have been built in the island’s scenic but rural areas.

The Vantone project is also being pitched mostly to Chinese and other overseas buyers not just because Vantone has a strong enough brand in China to catch the attention of buyers there, but because the location is not very appealing to locals, realtors say. At a 30-minute drive to the downtown, the mountainside apartments are far-flung by Taipei’s exacting standards.

“Everyone wants to buy a place above a 7-11 or next to a school,” says Yang, referring to the chain of convenience stores so ubiquitous in central Taipei that a walk of more than 10 minutes to the nearest could be considered a slog.

“We are trying to tell our clients they should change their minds,” adds his brother Jimmy, also an executive with Southern Land. “You have to have the view. In the city you just see the next building ... that’s not luxury.”

The adjacent Yangming mountain, a protected natural area, has a handful of stand-alone villas. Future supply is limited because of environment regulations, but existing properties are undervalued by as much as half because they are seen as inconvenient, says Kyle Wang, Sotheby’s general manager.

Most developers say that even if Taiwan does eventually open the door to Chinese investors looking for holiday homes in inconvenient yet scenic locales such as Yangming, that change will not happen quickly.

As Larry Yang says: “This thing cannot be hurried because China is such a big country. If there were no regulations, Taiwan would be flooded.”