Fri, Nov 09, 2018 - Page 12 News List

House prices and mortgages hold steady as bear market sees only marginal slips

By Crystal Hsu  /  Staff reporter

Housing remained difficult to afford in the second quarter, especially in Taipei and New Taipei City, where mortgage payments accounted for more than half of household incomes as home prices held steady despite a lukewarm market, the Ministry of the Interior’s Construction and Planning Agency said in a report.

Home prices nationwide were about nine times average household income, a marginal decline from the previous quarter and from the same period last year, the agency said on its Web site after analyzing 24,054 transactions in the April-to-June period.

The average mortgage burden was 36.9 percent, down 0.35 percentage points from the preceding quarter and 2 percentage points from the same period last year due to further home price corrections and wage increase, it said.

The mortgage burden measures mortgage payments on 20-year housing loans for new loans as a percentage of median income.

Mortgage burdens of less than 30 percent are considered reasonable and figures above that are deemed high, the agency said, adding that burdens in excess of 50 percent are excessively high.

Home prices amounted to 15.01 times and 12.27 times household incomes in Taipei and New Taipei City respectively, easing 0.63 and 0.43 times from a year earlier, the study found.

Mortgage burdens remained exceptionally high at 61.56 percent of disposal incomes for homeowners in the capital and at 50.32 percent in New Taipei City, it said, although they declined 2.72 and 1.87 percentage points respectively from the same period last year.

A shift in focus by developers to small apartments helped improve affordability as investors fled the market following the introduction of unfavorable property taxes.

While many believe it is ill-advised to buy or sell houses, ample liquidity and low interest rates have lent support to home prices.

Mortgage burdens exceeded the 30 percent threshold in 10 other cities and counties, the agency said.

Taichung ranked third in terms of mortgage burden with 38.14 percent, followed by Changhua County at 34.54 percent, Hsinchu County at 34.31 percent and Taoyuan at 33.32 percent.

Mortgage burdens were 32.93 percent in Yilan County, 32.56 percent in Kaohsiung, 32.31 percent in Hualien County, 31.72 percent in Nantou County and 31.35 percent in Miaoli County, it said.

Penghu County had a mortgage burden of 30.59 percent, but a sample of fewer than 100 cast doubt on the accuracy, it said.

Keelung reported the lowest mortgage burden figures, of 21.58 percent, trailed by Chaiyi at 21.9 percent and Pingtung at 23.36 percent, it said.

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