Fri, Nov 30, 2012 - Page 3 News List

Policies leading to high house prices: academics

By Loa Iok-sin  /  Staff reporter

Although the government has been attempting to stop house prices from rising rapidly, academics yesterday said that it was actually the government’s policies that had led to skyrocketing real-estate prices and urged it to take a turn in its policy direction.

“Although the government has implemented some policies — such as building low-cost or social housing projects, giving subsidies on mortgages and granting loans with favorable interest rates — none of the policies are helping to reduce real-estate prices,” Taipei Association for Development of Real Estate and Land chairman Chen Kuang-hsiung (陳光雄) told a public hearing at the Legislative Yuan yesterday.

“The policies are not helping, because these policies are all essentially encouraging people to buy real estate,” he said.

Low-cost housing complexes are sold to the economically disadvantaged, while home loan subsidies and favorable loan interest rates are also aimed to help house buyers, and “when everyone is buying and the government is encouraging buying, it is hard for house prices to go down,” Chen said.

“The government should suspend many of the measures aimed at helping potential house buyers and create more incentives for house rental, so that those who don’t have the absolute need to buy a house can rent properties,” he said.

Some of Chen’s suggestions include building rental-only public housing on government land and relaxing the criteria for rental subsidies.

“There are people who own houses in rural areas in central or southern Taiwan, but live in Taipei. They are thus excluded from applying for rental subsidies when they actually have the need in Taipei,” Chen said.

“They should be granted rental subsidies,” he added.

Chuang Meng-han (莊孟翰), an associate professor at Tamkang University’s Department of Industrial Economics, agreed with Chen, urging the government to take a more aggressive role in preventing real-estate prices from skyrocketing further.

Citing Germany’s housing policy as an example, Chuang said that while the German government collects a property tax of 1 percent to 1.5 percent, it also collects a property trading tax of 3.5 percent, in addition to a 15 percent tax on the net profit that a seller makes from selling a property.

“In addition, when the selling price is 20 percent higher than a ‘reasonable price,’ the seller can be penalized with a fine of up to 50,000 euros [US$64,920] and imprisonment of up to three years,” Chuang said.

Hsu Shih-jung (徐世榮), a professor at National Chengchi University’s Department of Land Economics, said that housing is not a commodity, but a basic human right.

“The government, after President Ma Ying-jeou (馬英九) signed the two international human rights covenants, is obliged to protect this right of the people,” he said.

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