Most Taiwanese find housing price hikes acceptable, as long as the mortgage burden falls within 35 percent of their household income, a survey by Sinyi Realty Inc (信義房屋) said yesterday.
About two-thirds of respondents cap mortgage payments at within 35 percent of household income, but would grant more flexibility for houses in Taipei, the survey showed.
About 13 percent said they could go as high as more than 50 percent for houses in the capital, Sinyi research manager Tseng Ching-der (曾進德) said.
Photo: CNA
The rising trend in property prices has not dampened purchasing interest, because most home buyers still manage to get loans within the 35 percent limit, he said.
The 35 percent limit is sustainable, because banks are increasingly offering 30-year mortgage payment schemes, from mostly 20 years in the past, making home purchases more accessible, Tseng added.
As high as 73 percent of respondents in Taichung said they could tolerate a 35 percent mortgage burden, followed by 70 percent in Tainan, 69 percent in New Taipei City and Taoyuan, 68 percent in Hsinchu City, and 62 percent in Taipei.
In Taipei, 38 percent of respondents said they could accept a mortgage burden of more than 40 percent, compared with 27 to 37 percent for home buyers elsewhere, it said.
The findings are not surprising given that housing prices are much higher in Taipei, Tseng said, adding that record-low interest rates and a longer grace period of up to five years for first-home buyers have lent support to home purchases.
However, Tseng warned against overleveraging, as central bank Governor Yang Chin-long (楊金龍) last week indicated that he would move toward normalizing the monetary policy next year, with potential rate hikes of 25 basis points if all sectors emerge from the COVID-19 pandemic and inflationary pressures increase.
Home buyers should give serious thought to taking on a higher mortgage burden and see if their life would remain the same, given potential rate hikes next year, Tseng added.
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