The nation’s housing price index rose to 101.59 in the second quarter of this year, up from three months earlier and increasing for the fourth consecutive quarter as home prices rose modestly, helped by GDP growth and low interest rates, Ministry of the Interior data showed yesterday.
The findings lent support to observations of a slow, but gradual recovery in the local property market, with the pace of recovery more evident in the south than the north, analysts said.
The nation’s economy picked up 2.4 percent year-on-year during the April-to-June period and likely contributed to the property price hikes, the ministry’s report said, adding that low borrowing costs also helped stimulate buying interest.
Mortgage interest rates averaged 1.622 percent in the second quarter at state-run lenders Land Bank of Taiwan (土地銀行), Taiwan Cooperative Bank (合庫銀行), Bank of Taiwan (臺灣銀行), Hua Nan Commercial Bank (華南銀行) and First Commercial Bank (第一銀行), the report said.
The property market’s performance was also boosted by bullish domestic financial markets, it added.
The supply side made contributions by introducing more new construction projects, totaling 35,261 units, and obtaining 5,707 land0use licenses, it said.
Growth momentum in terms of supply was high at 78,927 deals, compared with the number of transactions during the same period last year, the ministry said.
The latest housing price data meant home ownership grew increasingly untenable, with an average apartment costing 8.79 times the average annual household income, up 0.13 points from three months earlier, a separate report by the ministry found.
The figure rose to 14.45 times income for homebuyers in Taipei, where the mortgage burden took up 59.25 percent the average household income, it said.
The burden was also heavy in New Taipei City, where average home prices amounted to 11.85 times of the average household income, of which 48.59 percent would be used for mortgage payments for 20 years, it said.
The average mortgage burden was 36.06 percent nationwide, with Taichung and Changhwa also surpassing the threshold at 38 percent and 36.68 percent respectively, the report said.
Mortgage payments in Hualien, Hsinchu and Nantou counties were just below the average at 35.63 percent, 33.77 percent and 33.14 percent respectively.
Kaohsiung followed at 31.48 percent.
A mortgage burden of less than 40 percent of the average household income suggests low affordability, while a burden higher than 50 percent indicates ultra-low affordability, the ministry said.
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