Gap between house prices and wages hits a new high

With housing prices continuing to soar and incomes remaining stagnant, the ratio of housing prices to average annual salaries climbed to a new high in Taipei last year, a report released by Evertrust Rehouse Co (永慶房屋) said.

"People have found it even harder to afford a house in Taipei in recent years," the housing agency said in a recent report.

The average price for a 30-ping (100m2) apartment in Taipei last year was NT$10.12 million (US$303,100), representing an increase of 19 percent from 2005, Evertrust Rehouse said.

However, average annual disposable income in Taipei households was only NT$1.07 million last year, down from NT$1.14 million in 2005, the report showed.

This meant the public would have to save every penny they make for 9.43 years to be able to buy a house in Taipei, Evertrust Rehouse said.

The ratio of housing prices to average annual salaries rose steadily from 6.04 in 2003, when the SARS outbreak heavily impacted the property market, to 7.12 in 2004 and 7.46 in 2005, the agency's statistics showed.

Housing prices in Taipei's upscale Xinyi District saw the largest increase, while the salaries of a large number of residents in the old community within the district slid. That gap put the district at the top of the list with a ratio of 11.96, Yeh Lin-chi (葉凌棋), general manager of Evertrust Rehouse said.

The Zhongshan District saw the second-highest ratio of housing prices to average annual salaries at 11.26, boosted by an influx of high-end apartments in the Dazhi (大直) area, Yeh said.

Wanhua District, an older community with few new buildings being constructed, had the lowest ratio at 5.93, followed by Nangang District with 6.78, the agency's statistics showed.

Meanwhile, the statistics bureau announced yesterday that the average monthly salary of workers in the service and industrial sectors in the first quarter had risen 1.73 percent to NT$55,529 from a year ago.

However, the slight increase in income was barely enough to raise housing affordability in Taipei.

Given limited land supply and a large number of high-end luxury apartments being introduced in the market, housing prices in Taipei will stay at high levels, Yeh said.

Recent land auctions by the city government attracted record bids of up to NT$3.88 million per ping, which are expected to further push up housing prices in the future.