On the eve of the implementation of an integrated house and land sales tax to help curb real-estate speculation, the government last week announced it would raise the ceiling for a low-rate mortgage scheme to help young people deal with a housing availability problem.
The Executive Yuan on Thursday approved the Ministry of Finance’s proposal to hike the quota of a preferential home mortgage program for first-time homebuyers between the ages of 20 and 45. Each eligible homebuyer can now apply for up to NT$8 million (US$241,940.36) in loans, an increase from the previous NT$5 million, with the repayment period ranging from 20 years to 30 years.
The ministry said it is necessary to increase the lending because the current limit does not meet the needs of would-be homebuyers, as average housing prices in many urban areas remain high. About 7,290 households are expected to benefit from the increase this year, the ministry said.
Higher preferential mortgages for young people is part of a coordinated effort by government agencies in recent months to keep the property market from cooling down too fast and too deeply to affect the overall economy.
In August, the central bank partially eased its credit controls on property markets in northern Taiwan’s suburban areas to avoid a hard landing. The Financial Supervisory Commission in November agreed to lower the minimum yield required for domestic insurance companies investing in commercial properties from 2.805 percent to 2.555 percent in a move to invigorate the office building market.
The wave of market-friendly policies appear to be good complementary measures to the implementation of the new integrated levy on house and land transfers, which introduces taxes of between 10 percent and 45 percent on property transactions, depending on the duration of ownership.
However, it is hard to predict the effectiveness of those market-friendly measures. Some said they are likely to provide a buffer to absorb a modest level of instability, after the once-booming housing market appeared to have halted abruptly last year; some suspect the government made the moves out of political considerations ahead of the Jan. 16 elections; and others fear the expanded preferential mortgage scheme will just encourage more first-time homebuyers to buy houses and burden themselves with a life-long loan and end up sacrificing their future quality of life.
Young people have been avoiding the housing market in recent years because their job options are limited, they have a variety of debt and are apprehensive about the high cost of housing and the growing gap between rich and poor. In addition, with stagnant wages, the thought of home ownership is increasingly adding stress to young married couples, leading many to consider having fewer children.
Consequently, the problem of Taiwan’s demographic shift — evidenced by a low birthrate and an aging population — will only exacerbate the issues of a small labor force, weakened productivity and slower GDP growth in the long run.
Home ownership is a big commitment and sometimes it is expensive and a life-long burden on personal finances. Even though Taiwan’s housing market has shown signs of slowing recently, home prices are still high in cities — and extremely high in Taipei — where many young people want to live.
If there is anything the government can do to solve the problem of housing affordability and availability, it would create a great opportunity for the younger generation to settle down, attain some type of decent job, start a family, raise children and have extra money to consume and invest.
This would be a strong commitment for the three presidential candidates to make, and one that would get people listening.
In their recent op-ed “Trump Should Rein In Taiwan” in Foreign Policy magazine, Christopher Chivvis and Stephen Wertheim argued that the US should pressure President William Lai (賴清德) to “tone it down” to de-escalate tensions in the Taiwan Strait — as if Taiwan’s words are more of a threat to peace than Beijing’s actions. It is an old argument dressed up in new concern: that Washington must rein in Taipei to avoid war. However, this narrative gets it backward. Taiwan is not the problem; China is. Calls for a so-called “grand bargain” with Beijing — where the US pressures Taiwan into concessions
The term “assassin’s mace” originates from Chinese folklore, describing a concealed weapon used by a weaker hero to defeat a stronger adversary with an unexpected strike. In more general military parlance, the concept refers to an asymmetric capability that targets a critical vulnerability of an adversary. China has found its modern equivalent of the assassin’s mace with its high-altitude electromagnetic pulse (HEMP) weapons, which are nuclear warheads detonated at a high altitude, emitting intense electromagnetic radiation capable of disabling and destroying electronics. An assassin’s mace weapon possesses two essential characteristics: strategic surprise and the ability to neutralize a core dependency.
Chinese President and Chinese Communist Party (CCP) Chairman Xi Jinping (習近平) said in a politburo speech late last month that his party must protect the “bottom line” to prevent systemic threats. The tone of his address was grave, revealing deep anxieties about China’s current state of affairs. Essentially, what he worries most about is systemic threats to China’s normal development as a country. The US-China trade war has turned white hot: China’s export orders have plummeted, Chinese firms and enterprises are shutting up shop, and local debt risks are mounting daily, causing China’s economy to flag externally and hemorrhage internally. China’s
During the “426 rally” organized by the Chinese Nationalist Party (KMT) and the Taiwan People’s Party under the slogan “fight green communism, resist dictatorship,” leaders from the two opposition parties framed it as a battle against an allegedly authoritarian administration led by President William Lai (賴清德). While criticism of the government can be a healthy expression of a vibrant, pluralistic society, and protests are quite common in Taiwan, the discourse of the 426 rally nonetheless betrayed troubling signs of collective amnesia. Specifically, the KMT, which imposed 38 years of martial law in Taiwan from 1949 to 1987, has never fully faced its
RSS