The government’s proposed low-cost “modern housing” program may not help families who wish to own their own homes because of a low supply of affordable housing and continuing high home prices in urban areas, analysts said yesterday.
Council for Economic Planning and Development Minister Christina Liu (劉憶如) on Wednesday announced a proposed low-cost modern housing program, borrowing the concept from Singapore’s successful program to construct public housing, in an effort to assist low-income families own homes instead of being lifelong renters.
However, Chang Chin-oh (張金鶚), a land economics professor at National Chengchi University, said the program “does not make any sense,” as the program doesn’t make purchasing a house any easier.
“The supply of these modern houses would not be enough to meet the demand,” Chang said by telephone.
Furthermore, the program will not help curb high house prices because excessive home prices in urban areas were not caused by a low supply, but were driven up by rising demand from speculators, Chang said.
“In fact, this modern housing program allowing home buyers to buy and sell anytime would increase speculative transactions,” he said.
Chuang Meng-han (莊孟翰), a professor of industrial economics at Tamkang University, also said the program would not help to bring down house prices, unless the supply of affordable houses could reach a scale similar to Singapore’s public housing program.
More than 80 percent of families in Singapore live in public housing, which drives down real-estate prices, said Chiu Tai-shuan (邱太煊), an analyst for Taiwan Realty Co (台灣房屋).
Furthermore, Taiwan’s modern housing program would be much more successful if the properties were rented instead of sold, as families would be unwilling to buy these houses, Chuang said.
Chuang said the government should come up with a policy that would encourage people who own several houses to rent the additional properties, as the current number of empty houses can make a big difference.
To curb excessive house prices and to help meet the demands of low-income families for affordable housing, an alliance of non-homeowners (無殼蝸牛聯盟) said that the government should pass an affordable housing act as fast as possible, instead of launching these impractical programs.
“An affordable housing law could help provide the government with the basis for launching housing policies and programs, and not just running around like a chicken with its head cut off, like it is now,” the alliance said in a note.
However, Chiu said the modern housing program is a good concept, which the government should look into as a long-term policy and put into place as soon as possible.
“The program should have been executed earlier, before house prices went up, but it is not too late to help low-income families buy a house through this program,” Chiu said by telephone.
However, the program might not help lower real-estate prices in the short term, as the construction of the buildings would take two to three years, Chiu said.