While foreigners populate Hong Kong, Singapore and Shanghai, Taipei is largely left to its own devices, which is a pity since it’s one of the most appealing capital cities in east Asia.

Surrounded on all sides by mountains, it has a sub-tropical climate (with the occasional severe typhoon thrown in), tree-lined streets, outstanding food and historic buildings. These days the government is pouring money into infrastructure projects to spruce up the city and improve the quality of life.

Tough pollution laws have cracked down on the scooters that used to belch fumes; new roads and a sparkling metro system – one of the most expensive rapid transit systems ever built – have eased congestion. Taipei is big but not so big that you can’t zip across it on the metro or in a taxi in less than half an hour. It is also the most Wi-Fi-ed city in the world.

The biggest change to Taipei in recent years has been the redevelopment of the rural east of the city. The area around Taipei 101, a 508m-tall pagoda-like skyscraper, is now a hi-tech enclave of glossy shops and hotels which are the face of modern Taiwan. More interesting for potential property investment are older residential areas like Yongkang Park where new apartments stand alongside old Japanese houses, relics of Taipei’s colonial past.

Yongkang is an area for walking in. Its streets are lined with rice vendors and laundries, as well as tea shops and antique stores. It has an enticingly worn air reminiscent of Hong Kong before the glitz set in; a fashionable set of newcomers have now warmed to its old-fashioned charms. On one side it’s edged by Daan Forest Park, the city’s largest public green space.

Daan proper is another popular central neighbourhood. Less sedate, this is part of the eastern district of the city, home to the city’s most fashionable boutiques, bars and restaurants. Department stores stand on the big shopping streets, but behind them the buildings drop in height and cosier neighbourhoods emerge. As darkness falls and the neon starts to twinkle, vendors set up shop on the streets around Lane 216, and every restaurant and shaved-ice store is full to capacity.

The Japanese occupied Taiwan for 50 years, until 1945, and many of the official buildings still date from that era. Modern Tokyo is still a big influence on Taipei street style and its presence is felt in other ways, notably the ubiquity of convenience stores. Familiar names such as 7-Eleven and Starbucks are present in Taipei but so too are local chains such as Hi-Life convenience stores and Yogurt Me (Taipei’s Pinkberry, see Monocle issue 4) which sells yoghurt ice cream.

Rich Taipei residents head for the hills in mansions on Yangming Mountain while expats have long favoured Tianmu, but the central ’hoods of Yongkang and Daan now draw in younger residents who want to be closer to the action.

Flights to Taipei:
From London
Cathay Pacific – one flight daily (indirect)

From Tokyo
JAL – four flights daily
ANA – two flights daily

From Los Angeles
Singapore Airlines – one flight daily

Eslite
245 Dunhua South Road, Section 1, + 886 2 2775 5977, eslitebooks.com
A 24-hour branch of Taiwan’s biggest book chain which is rammed with browsers day and night. Essential stop for books about Taipei and magazines in Chinese, Japanese and English.

Off Chaism
6 Lane 12, Yongkang Street, + 886 2 2341 8272
If you’re in the market for High Mountain Oolong or Buddha’s Hand tea, this Yongkang Park store is the place to come. Tea expert Jia Min brews a selection of the finest leaves for customers to try and there’s a library of books on tea for enthusiasts.

Hdj House
54-1 Yongkang Street, + 886 930 488 866
Yongkang Street comes alive after 17.00 when the antique shops and the indoor antique market open. Hdj House is a slice of Taipei history, a cosy treasure trove selling everything from old family photographs to furniture.

Uncle Jack’s
7 Lane 49, Anho Road, Section 1, + 886 2 2778 2227
Artfully chaotic secondhand furniture shop, part of a grid of back streets rich in bars and restaurants. Good vintage finds and an excellent selection of lights. A few doors along from new bread shop, Lugar.

Booday
18-1 Lane 25, Nanjing West Road, + 886 2 2552 5552, booday.com
Out of the neighbourhood but too good to miss, this store is run by Taipei design company Mogu. Booday sells its own-design T-shirts and bags, plus art by Taiwanese artists. Pick up a copy of its journal, Mogu, and sit in the café upstairs.

Beitou
villa32.com
On the outskirts of the city, the volcanoes of Mount Datun at the rim of the Taipei basin fire up hot springs. The leafy suburb of Beitou – an MRT ride away from central Taipei – is a favourite weekend retreat. The Japanese know a thing or two about hot-spring bathing and they loved Beitou. Stay at Villa 32, an exquisite hotel with indoor and outdoor baths.

National Palace Museum
221 Chih-shan Rd, Section 2, Shih-lin, + 886 2 2881 2021, npm.gov.tw
One of the finest collections of Chinese art in the world, it represents the cream of the Imperial collection: 65,000 objects covering 5,000 years of Chinese history. Only a small proportion is on display at any one time, the rest is kept safe from Taipei’s heat and humidity in tunnels built into the mountain.

Sun Yat-sen Memorial Hall
505 Jen-ai Rd, Section 4, + 886 2 2758 8008
This memorial is dedicated to the man dubbed the “father of modern China”. There’s an imposing 6m-high statue of the good doctor in the entrance. Sits in the manicured grounds of Zhongshan Park close to the towering city landmark, Taipei 101.

Les Suites
12 Ching-Cheng Street, + 886 2 8712 7688, suitetpe.com
Monocle’s regular Taipei lodging, this centrally-located boutique hotel has two branches, one in Daan and a larger one here at Ching-Cheng Street. The interior is low-key modern Asian and the rooms a decent size. Loyal regulars won’t stay anywhere else.

VVG B&B
18 & 20 Alley 40, Lane 181 Sec. 4, Zhongxiao E. Road, + 886 2 2775 4386
New two-room B&B on a pretty backstreet close to Civic Boulevard. A taste of Taipei life in a typical walk-up apartment with quirky décor, crisp linen sheets and great bathrooms. It’s run by popular restaurant VVG, so expect a delicious breakfast. VVG (Very Very Good) Table and VVG Bistro are also on the same street.

Mono Mono
17 Alley 29, Lane 127, Anhe Road, Section 1, + 886 2 2754 0868
Dimly-lit lounge populated with young Daan residents. Barman Jeff Su favours Hendrick’s in his G&Ts and has turned making a dry Martini into an art form.

Ecole
6 Lane 1, Qingtian Street, + 886 2 2322 2725
One of the best of a new crop of cafés in Yongkang Park, Ecole is on a small street behind the Catholic church. Owner Min-fu Chien also owns furniture shop Mooi next door.

Dian Qiang
136 Yanji Street, + 886 2 8771 8270
Tiny but sociable Japanese-style sake bar which opens on to the street. Also serves steaming oden and fresh fish grilled on the spot. Regulars come to chat to charming host-chef, local boy Kuan Kai “Darryl” Wang, (see Residents).

Nonzero
5 Alley 4, Lane 27, Ren-ai Road, Section 4, + 886 2 2772 1630
Imaginative young chef Ada Chen cooks quality comfort food with a twist using the freshest ingredients, organic where possible. The interior is as relaxing as the food, and there’s a store attached.

James Kitchen
42-5 Yongkang Street, + 886 2 2343 5355
This snug restaurant is a favourite with the academics and magazine editors who’ve moved into the neighbourhood. Crowds pile in for their Taiwanese home cooking – hearty stews and pork on rice.

Fuji Bar
67 Lane 85, Linsen N. Road, + 886 2 2100 1255
Difficult to find, but worth grappling with a map for. Run with old-school flair by a Mandarin-speaking barman from Hokkaido. Every nook is filled with miniature bottles and shelves are lined with whisky bottles held by regulars.

Chow Wen Chen
43, restaurateur
I used to live in Tianmu but wanted to live in the city centre. The Daan area is very convenient – it’s got all I need – it’s close to good bookshops, restaurants and bars. It’s neither the most expensive nor the cheapest area to live in. It’s difficult to find unusual spaces in Taipei. Artists have to work in apartments or old office buildings. I bought this apartment – the government had a scheme encouraging people to buy in the city. I have a roof terrace on top with a big table for entertaining.

Shu-ming Lin
31, brand consultant [Lives with boyfriend Daobao Dao, 33, director/producer]
I grew up in the 101 area when it was still farmland. It wasn’t fancy at all. We knew the area was going to be developed and then suddenly all the buildings were 30-storeys high. These days, Taipei apartments are either super-new or 30 years old. We found a great place in an old building that had been renovated. It’s an interesting area – full of small boutiques and places to eat. I know I could have a three-storey house in the country for the money I’m paying but I wanted a good place. It enriches my life.

Kuan Kai Wang
29, chef and photographer
I was born here – we call the area Lane 216 – and it’s still full of the things I remember, like the fruit shops on the street corners. I see the same people who’ve always lived here. I went to school round here and my classmates are still in the neighbourhood too, running shops and restaurants. There’s a connection with the past. Now I have a two-year-old son, my parents visit every weekend. It’s a good area for walking around and there’s good food too – there’s a great goose noodle shop and a street vendor who sells the best pork blood sausages.

A-Ren Cheng
43, brand manager for Jamei Chen
I came to Yongkang Park by chance – my friend was looking to open a tea house here. As soon as I saw this place I fell in love with it. It’s a lovely area – there are still lots of small shops and good cafés and a traditional market across the road. It’s a very popular area, but also very quiet. Sometimes I feel like I’m not in the city at all. I close the door and I’m in another world. I lived in France for nine years and I missed the gardens. I put all the plants here myself – people in Tapei often use these courtyards for parking cars.

House prices in Daan
One bed: €133,000 – 35 sq m
Two bed: €216,500 – 85 sq m
Three bed: €333,000 – 120 sq m

Sinyi
+ 886 2 2755 7666; sinyi.com.tw
David Wang is recommended – an English speaker used to dealing with foreigners.

• Overheated Taipei market showing signs of cooling off.
• Reasonable transaction costs.
• Home ownership rate is 87 per cent.
• Average home cost in Taiwan is €130,000 (although Taipei raises the average).

For foreigners buying property in Taiwan, there’s a basic rule of reciprocity – you can buy so long as Taiwanese can also buy property in your home country. Foreigners can buy and sell property for personal use and investment but not solely for profit. Apartments are usually found through agents, although it’s not uncommon for sellers to post their property on a bidding website and deal with the buyer directly.

The process for buying properties is the same for Taiwanese and foreign nationals. Once the buyer and seller have reached an agreement on the price, a contract is drawn up with both parties signing with a property agent as witness. The buyer has to register – for a fee – the change of ownership with the local Land Registration Office and pay the deed tax, notarisation fee, stamp duty and agent’s fee.

For house owners, there is an annual house tax of 1.38 per cent of the current value of the property and land tax which is 0.2 per cent for residential property. Foreign non-residents (anyone who spends less than 183 days a year in Taiwan) has to pay 20 per cent tax on their gross income from sub-letting property in Taiwan.