The nation’s housing affordability deteriorated in the first quarter of this year, as house prices gained 0.11 percent to 9.72 times of household income and mortgage burdens took out 41.19 percent of income, up 0.94 percentage points from three months earlier, Ministry of the Interior data showed on Wednesday.
The data ran counter to observations by policymakers that the housing market has cooled due to a series of selective credit controls and interest rate hikes.
The house price to income ratio climbed to the second-highest level in history next only to 9.8 times seen in the third quarter of last year, and meant families have to save all they earn for 9.72 consecutive years to own a house.
Photo: Hsu Yi-Ping, Taipei Times
The challenge is much bigger in Taipei, where home prices equal 15.22 times household income, 12.77 times in New Taipei City and 11.34 times in Taichung, the data showed.
At the same time, mortgage burdens constituted 64.5 percent of household income in the capital, 54.13 percent in New Taipei City and 48.08 percent in Taichung.
The government defines mortgage burdens of 30 percent as reasonable, burdens of 30 to 40 percent as relatively high, and burdens of more than 50 percent as excessively high.
By the measure, only houses in Pingtung County, Keelung, and Chaiyi city and county met the “reasonable” test, since mortgage burdens elsewhere fell between 30.96 percent and 64.5 percent, the ministry’s data showed.
Mortgages in Kinmen County were at 35.45 percent and they stood at 34.42 percent in Penghu County, the ministry said.
The mortgage burden was 39.7 percent in Nantou County and 37.68 percent in Hualien County, it said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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