Housing affordability grew worse in the first quarter, as the average mortgage burden climbed by 0.52 percentage points to 38.35 percent nationwide, a report released yesterday by the Ministry of the Interior showed.
The data suggest that mortgages accounted for a big chunk of the disposable income of households on average and this would worsen after the central bank raised interest rates twice and increased the mortgage burden by 1.5 percent.
The ministry classifies mortgage burdens as follows: below 30 percent, reasonable; higher than 30 percent, slightly high; more than 40 percent, relatively high; and more than 50 percent, overly high.
Photo: Lam Yik Fei, Bloomberg
Mortgage burdens in Taipei constituted 64.91 percent of household incomes, retreating from 65.09 percent three months earlier as housing prices became less expensive at 16.22 times the average household income, the ministry said.
Mortgage burden in New Taipei City ranked second at 51.45 percent, gaining 1.43 percentage points from the preceding quarter, the ministry said.
During the first three months of the year, mortgage burden rose by 1.58 percentage points to 45.08 percent of household income in Taichung, where housing prices were 11.26 times the average household income, the ministry said.
Meanwhile, Yilan, Hsinchu and Changhua counties, as well as Tainan and Kaohsiung, all saw mortgage burdens surpass 35 percent, but the figure in Taoyuan declined a fractional 0.26 percentage points to 31.5 percent.
Keelung, Chiayi County and Yunlin County are among the few in Taiwan where the mortgage burden remained below the reasonable threshold of 30 percent, the ministry found.
The report also showed that the home price index, which gauges fluctuations in residential property values in the nation, rose 2.99 percent from a quarter earlier to 121.01 in the first quarter.
The ministry attributed the increase to robust economic growth, low interest rates and inflationary expectations.
In the January-to-March period, Kaohsiung and Taichung saw the largest increase in the home price sub-index among the six special municipalities, rising 4.7 percent and 3.65 percent respectively from the preceding quarter, data showed.
The sub-indices for Taoyuan and Taipei saw the lowest increases of 2.7 percent and 1.91 percent respectively, the data showed.
Analysts said housing price changes would not affect the mortgage burden of existing homeowners even though price corrections might mitigate the burden of new borrowers.
Despite headwinds ahead for the market, housing prices would hold firm, because sellers believe property is a good defense against inflation and economic upheavals, they said.
Additional reporting by CNA
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
RSS