With property prices in and around Taipei seemingly on a never-ending upward spiral, a protest group known as the “alliance of shell-less snails” crawled back onto the political scene last week after a two-decade hiatus, threatening action should the government fail to tackle the issue.
The alliance first came to prominence in 1979 when tens of thousands of people spent the night on Taipei’s Zhongxiao E Road protesting the same issue. While the Taipei landscape may have changed dramatically in the intervening period, the issue of vastly over-inflated property prices refuses to go away.
Many expected the property bubble to burst when the US subprime crisis shook the global economy and curtailed the generous pre-crash lending habits of banks. They viewed it as the market’s best chance of cooling off, but even then housing prices only experienced a slight dip before they began rising again.
Demand remains the main driver of property prices, but with Taiwan’s population growth stagnant and the amount of new residences coming onto the market in places like Taipei County’s Linkou (林口), Sanxia (三峽) and Sindian (新店) — many of which remain empty — the price boom does not appear to be the result of a lack of available housing.
Anecdotal reports that the property bubble is being caused by China-based Taiwanese businesspeople and retired civil servants using their generous pensions to snap up new property as investments, as well as international investors put off by even higher prices in places such as Hong Kong and Singapore, may be closer to the mark.
Whatever the reasons, the government is coming under increasing pressure to find solutions in addition to its current subsidy scheme as many people — even the middle-aged and those earning good salaries — are finding it almost impossible to purchase a family residence in or around the city.
The government’s task nevertheless is a thankless one. Continue with its light-touch attitude to the issue and it will be accused of abandoning the man on the street. Take action, however, and those with vested interests in the housing boom will accuse it of interfering in the market.
To its credit, the government has responded by halting sales of government-owned land — blamed by some for driving prices even higher — and has announced plans to construct low-cost public housing in Taipei suburbs, but these measures alone will not solve the problem.
To get to the root of the phenomenon, a thorough investigation is required and if speculators are found to be responsible, then new laws should be brought in to tackle them head-on.
Reasonable limits on foreign investment in real estate and a sizable capital gains tax on profits accrued when selling a second home are two measures that could help to curb speculation and cool down the market.
This would upset investors, but the government should remember that this is an issue that affects a large section of society and therefore should choose its targets wisely.
A few angry real estate developers are much easier to deal with than tens of thousands of disgruntled “snails” once again spending the night on the streets of the capital.
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