Thu, Nov 28, 2013 - Page 13 News List

Houses pricier than in Japan: Perng

TOO HIGH:The ratio of house prices to incomes in Taiwan averaged 8.3 last year, reaching 13.1 in Taipei, while the international level is between 3 and 4, DGBAS said

By Amy Su  /  Staff reporter

Central bank Governor Perng Fai-nan (彭淮南) said the government will continue to keep the nation’s property market in check, as housing prices in Taipei City were still higher than those in Japan to some extent.

Perng’s remarks came after legislators expressed concern about continuing rises in local property prices as local media reported yesterday that the launch of the Taipei Mass Rapid Transit’s (MRT) new Xinyi Line has boosted prices of an adjacent luxury housing project in Taipei’s Xinyi District (信義) to a record high of more than NT$4 million (US$134,807) per ping (3.3m2).

“Excluding public facilities, I fear that average housing prices in Taipei are more expensive than in Japan,” Perng said in a legislative question-and-answer session.

People usually get an apartment as large as 20 ping by paying the price of a 30-ping house, as they have to pay for the public facilities, which indirectly raises the overall price, Perng said.

The central bank is using selective credit tightening measures to curb property speculation in an attempt to stop a property bubble from forming, Perng said.

However, the central bank is not trying to clamp down on the whole housing market, he said.

To prevent housing prices from rocketing, the government should help increase the supply of affordable apartments, Perng said.

Last year, the ratio of house prices to incomes in Taiwan averaged 8.3, much higher than the standard level of between 3 and 4 set internationally, according to data offered by the Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday.

Furthermore, the ratio in Taipei reached 13.1 last year, evidence that Taiwanese homebuyers have a heavier burden than buyers in other countries, DGBAS data showed.

Commenting about the risk of the US tapering its stimulus, Perng said the central bank will closely monitor the risk of an asset pricing bubble in Taiwan.

Perng said he did not expect the US Federal Reserve to start tapering its bond buying of US$85 billion a month this year, given the US jobless rate still remained at a level above the target set by the Fed.

Separately, Perng said yesterday that the central bank would not oppose a suggestion from legislators of creating a sovereign wealth fund by allocating part of the nation’s foreign exchange reserve.

Perng said he did agree that the formation of the sovereign wealth fund may help improve the nation’s economy and boost the efficiency of the foreign exchange reserve.

However, that would be done only on the condition that the legislature has to draft a new law to regulate the use of the fund.

Perng said that to minimize any risks, the fund should be operated independently and it should not be linked to the foreign exchange reserve.

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