Taiwan’s housing prices soared to a new high in the second quarter and are expected to climb even higher in the coming year, with mortgage payments taking up a big chunk of household income, according to a government survey released yesterday.
The prices of houses sold in the April-to-June period averaged NT$10.43 million (US$358,235), rising 12.96 percent from three months earlier and constituting nine times average household income, the quarterly survey by the Construction and Planning Agency showed. The ratio climbed to 16.2 times for home owners in Taipei City, where housing costs gained 13.75 percent in the second quarter from the preceding quarter, the survey showed.
“The findings raised an alarm as they suggest a bullish outlook” despite the luxury tax on short-term home transfers, said Chang Chin-oh (張金鶚), a land economics professor at National Chengchi University, who led the survey.
A total of 46.8 percent of prospective home buyers expect housing prices to trend upward in the next 12 months, while 28.6 percent hold negative views, boding well for the market ahead, Chang said.
The academic pinned the blame on the government’s inconsistent housing policy as seen by the implementation of the luxury tax to curb housing prices on one hand and the offer of preferential loans to encourage home purchases on the other.
The stimulus measure muted the impact of the special sales levy — ranging from 10 percent to 15 percent of trading value — on houses resold within two years of purchase, Chang said.
Housing prices reached NT$27.78 million in Taipei City, or NT$571,000 per ping (3.3m2), in the second quarter, from NT$502,000 in the first quarter, causing nearly 60 percent of respondents to say they considered the prices unreasonable, the survey showed.
Investments drove 26 percent of home transfers in the capital, with 62 percent of buyers citing plans to take profit later, the survey said.
“The increasing value encourages profit-taking, a phenomenon that should draw the attention of authorities,” Chang said.
Investments accounted for 19 percent of home purchases in New Taipei City (新北市), with 55 percent of buyers seeking to profit from price differences, the survey said, adding that 96 percent of investors own two houses or more.
Housing prices accelerated 19.38 percent to NT$9.91 million a unit in New Taipei City in the second quarter, from NT$9.23 million in the previous quarter, despite a reported exit of speculators, the survey said.
Mortgage payments took up 40.4 percent of household income in Taipei City, compared with 38.7 percent in New Taipei City and 34.0 percent nationwide, the survey showed.
About 33 percent of families that bought houses in the second quarter earn between NT$30,000 and NT$60,000 per month, while another 26.5 percent make between NT$60,000 to NT$90,000 a month, the survey showed.
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