The plan to build more public housing will not help rein in soaring residential real estate prices or cool the property market due to its small supply and rent restrictions, real estate analysts said yesterday.
The Ministry of the Interior yesterday announced five sites in the Greater Taipei area where it will construct 1,661 units of public housing that will be leased to economically disadvantaged people when completed.
Stanley Su (蘇啟榮), senior researcher at Sinyi Realty (信義房屋), said the public housing will not have an impact on the housing market given its limited supply.
“The 1,661 public housing units account for only 4 percent of overall new apartments in the Great Taipei Area that has seen an average of 42,000 new units a year over the last three years,” Su said. “The supply is too small to affect the market.”
The fact that only qualified people can apply to rent the public housing makes it more unlikely that it will replace permanent home ownership, Su said.
Chinese-language Housing Monthly (住展雜誌) spokesman Ni Tzu-jen (倪子仁) said the construction of public housing, due to start at the end of next year, will take an extra one to two years to complete and may not make a splash in the rental market.
Rental rates in Taipei City and Taipei County have been steady in recent years and landlords may seek to attract tenants through management enhancements or offer of more competitive terms, Ni said.
If the government is serious about allaying fears over increasingly unaffordable housing costs, it needs to build much more public housing, Ni said.
“There is still a plenty of government-owned land for public housing in Chungho, Lujhou, Linkou and Sinjhuang in Taipei County,” Ni said. “It is true that owning a house has become untenable in Taipei City for most salaried people.”
Chang Chin-oh (張金鶚), a land economics professor at Chengchih University, said public housing will prove little more than a political gesture during election season to win votes, judging from the tiny supply.
“The small number of units [of public housing] is out of proportion with the number of people who can’t afford to buy their own house,” Chang said. “Their completion two years from now will be too late to reverse the price hikes.”
Chang said a property transaction tax and other measures would be more effective in stemming real estate speculation and averting housing bubbles.