Housing unaffordability in Taiwan worsened in the second quarter of this year, when the average price for a home climbed to 10.65 times the average household income and mortgages were 46.02 percent of income, data released on Oct. 25 by the Ministry of the Interior showed.
The latest government data confirmed that house prices grew more expensive across Taiwan, including in outlying counties, while mortgages constituted an increased share of household financial resources.
“The house price-to-income ratio was at a record high in five of the six special municipalities,” said Tseng Ching-der (曾進德), research manager at Sinyi Realty Inc (信義房屋), the nation’s only listed broker.
Photo: CNA
The ratio was less than 10-fold in Taoyuan, Tainan and Kaohsiung three months earlier, but only Taoyuan was below the level in the second quarter, Tseng said on Monday.
The ratio was highest in Taipei at 16.36-fold, followed by New Taipei City (13.71), Taichung (12.69), Kaohsiung (10.39) and Tainan (10.29), the data showed.
House prices in Taoyuan averaged 9.13 times household income, an increase of 0.23 from the preceding quarter, although it remained below the national average, the data showed.
Mortgage burdens in Taipei, New Taipei City and Taichung rose to 70.69 percent, 59.27 percent and 54.83 respectively, with people eager to own a home regardless of affordability, the data showed.
Favorable government lending terms featuring an ultra-low interest rate of 1.775 percent, a five-year grace period and mortgages of up to 40 years are believed to have encouraged people to join the market.
The ministry deems mortgage burdens of 30 percent as “reasonable,” burdens greater than 30 percent as “moderately low” and burdens of more than 40 percent as “very low.”
Mortgage burdens in Tainan, Kaohsiung and Hsinchu City, as well as Yilan, Changhua, Nantou and Hualien counties surpassed the 40 percent mark, while Taoyuan (39.48 percent), Miaoli County (38.52 percent) and Taichung (37.12 percent) were near the alert level, the data showed.
Affordability also proved a challenge in outlying counties, with mortgage burdens of 39.72 percent in Penghu County and 38.26 percent in Kinmen County, the data showed.
Only mortgage burdens in Keelung were at the “reasonable” level at 27.99 percent, while Pingtung, Yunlin and Chaiyi counties were all above 30 percent, the data showed.
The data likely prompted the central bank in September to extend nationwide loan restrictions for second homes that had previously been limited to the special six municipalities and Hsinchu.
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