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.
Because much of what former US president Donald Trump says is unhinged and histrionic, it is tempting to dismiss all of it as bunk. Yet the potential future president has a populist knack for sounding alarums that resonate with the zeitgeist — for example, with growing anxiety about World War III and nuclear Armageddon. “We’re a failing nation,” Trump ranted during his US presidential debate against US Vice President Kamala Harris in one particularly meandering answer (the one that also recycled urban myths about immigrants eating cats). “And what, what’s going on here, you’re going to end up in World War
Earlier this month in Newsweek, President William Lai (賴清德) challenged the People’s Republic of China (PRC) to retake the territories lost to Russia in the 19th century rather than invade Taiwan. He stated: “If it is for the sake of territorial integrity, why doesn’t [the PRC] take back the lands occupied by Russia that were signed over in the treaty of Aigun?” This was a brilliant political move to finally state openly what many Chinese in both China and Taiwan have long been thinking about the lost territories in the Russian far east: The Russian far east should be “theirs.” Granted, Lai issued
On Tuesday, President William Lai (賴清德) met with a delegation from the Hoover Institution, a think tank based at Stanford University in California, to discuss strengthening US-Taiwan relations and enhancing peace and stability in the region. The delegation was led by James Ellis Jr, co-chair of the institution’s Taiwan in the Indo-Pacific Region project and former commander of the US Strategic Command. It also included former Australian minister for foreign affairs Marise Payne, influential US academics and other former policymakers. Think tank diplomacy is an important component of Taiwan’s efforts to maintain high-level dialogue with other nations with which it does
On Sept. 2, Elbridge Colby, former deputy assistant secretary of defense for strategy and force development, wrote an article for the Wall Street Journal called “The US and Taiwan Must Change Course” that defends his position that the US and Taiwan are not doing enough to deter the People’s Republic of China (PRC) from taking Taiwan. Colby is correct, of course: the US and Taiwan need to do a lot more or the PRC will invade Taiwan like Russia did against Ukraine. The US and Taiwan have failed to prepare properly to deter war. The blame must fall on politicians and policymakers
RSS