Tue, Apr 07, 2015 - Page 13 News List

Most think home prices unreasonable

UNAFFORDABLE:Housing transactions shrank 34 percent in the fourth quarter of last year and are likely to fall further as home-buying interest drops to a five-year low

By Crystal Hsu  /  Staff reporter

Nearly 60 percent of Taiwanese consider housing prices unreasonable, with the discontent ranking highest in Kaohsiung, a survey by the Ministry of the Interior showed.

The quarterly survey showed that 42 percent of respondents found housing prices unreasonable, while 17.4 percent said they were “extremely unreasonable.”

The sentiment is strongest in Kaohsiung, where 65.7 percent were discontent with housing prices, followed by New Taipei City at 62.9 percent, Tainan at 59.8 percent and Taipei at 59.3 percent.

The figures suggest that the feeling that housing prices are “relatively affordable” in southern Taiwan is tapering off, and “unaffordability” is increasingly becoming a nationwide issue.

The survey, which questioned prospective buyers, new home buyers, 15 banks and more than 2,000 brokers, showed that transactions shrank 34 percent year-on-year during the fourth quarter of last year.

Volumes are poised to drop further, with home-buying interest falling to a five-year low of 85 — based on an index in which a figure above 100 indicates healthy interest — the survey showed.

However, housing prices held firm at an average of NT$10.58 million (US$337,987) per unit, or NT$264,000 per ping (3.3m2), the survey showed. That represented a modest increase of 2 percent from three months earlier.

Home ownership costs about NT$26.25 million in Taipei, NT$11.22 million in New Taipei City, NT$8.24 million in Taichung and NT$7.4 million in Kaohsiung, the survey’s data showed.

Asked about the impact of mortgage payments on their quality of life, 22.6 percent rated it as huge or significant, while 70 percent described it as considerably significant.

The poll showed that 19.1 percent of respondents have to trim their necessity budget to meet mortgage payments, while 26 percent have to cut back on recreation and entertainment expenses.

It added that 45.7 percent make do by adjusting their wealth management or savings plans.

For investment-based transactions, 42 percent bought properties to receive rental income, 32.4 percent consider them a hedge against inflation and 20.9 percent are looking to future price increases, the survey showed.

Home buyers in the south are more interested in being landlords, accounting for 63 percent of the transactions in Tainan and 66.4 percent in Kaohsiung during the October-to-December period, the survey said.

Similar motives are driving people with plans to buy houses in the near future, the survey indicated. The survey lends support to a cautious sentiment.

On average, prospective buyers spent an average of 7.2 months looking at 12 different houses before reaching a decision, the survey said. The search lasted for a month in better time periods.

A total of 62 percent of respondents consulted the ministry’s real-price transaction Web site, virtually unchanged from the previous quarter’s 63, the survey showed.

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