Since last month, academics and market watchers have been discussing whether Taiwan’s housing market is overheating — a stark contrast to the chilly situation in the first five months of the year when the market was subdued by the COVID-19 pandemic.
Housing transactions in the nation’s six major municipalities last month rose 36 percent year-on-year and 12 percent month-on-month to 24,356 units, continuing a stable recovery from the previous two months and reaching a five-year high thanks to low interest rates, ample market liquidity and the COVID-19 outbreak having been brought under control.
The housing price index compiled by Sinyi Realty Inc showed that the figures in Taoyuan, Hsinchu and Kaohsiung hit record highs in the April-to-June period, while those in Taichung reached the second-highest on record. Figures in Taipei and New Taipei City rebounded to their 2015 highs.
Cathay Real Estate Development Co’s latest survey also found that prices last quarter held resilient amid the COVID-19 pandemic and were moving close to their historical high five years ago.
Due to low interest rates and stronger market competition, some lenders have even offered loans to potential homebuyers of up to 90 percent of a property’s value, which only adds fuel to an already hot situation in the housing market.
Central bank Deputy Governor Chen Nan-kuang (陳南光) earlier this month in The Taiwan Banker magazine wrote that the government should adopt “macro-prudential” measures before the public’s expectations of a sharp rise in housing prices take hold. Chen also warned that the continuing rise in housing prices would not help economic recovery, but might lead to more serious misplacement of national resources.
Furthermore, National Taiwan University economics professors Wu Tsong-min (吳聰敏), Li Yi-ting (李怡庭) and Chen Shiu-sheng (陳旭昇) in a newspaper commentary on Oct. 4 called on the central bank to clearly define its criteria for determining whether the market has overheated — a move they said would help the public better understand the rationale behind adjustments in the bank’s selective credit controls and allow people to have more accurate expectations for the housing market.
Minutes from the central bank’s past three quarterly policymaking meetings indeed show that board members are divided over the issue of housing prices.
At a news conference following the central bank’s Sept. 17 quarterly board meeting, Governor Yang Chin-long (楊金龍) said that the housing market has overheated only in parts of the nation.
During a meeting of the legislature’s Finance Committee on Thursday last week, Yang again played down the risk and denied that the central bank plans to tighten credit controls to rein in rising prices.
However, housing transactions and prices have been increasing over the past few months, aided by Taiwanese companies returning from China, international technology giants stepping up investments in the nation and land purchases by local developers and life insurance companies, according to a report issued by the central bank on the day before Yang appeared before the committee.
As global central banks have embarked on aggressive monetary easing to revive economies hit by the pandemic, the liquidity-driven rally in Taiwan’s housing market is likely to continue for a while.
A booming property market is not entirely a bad thing for the economy. However, at a time when the real economy is being hammered by the pandemic, a continued rise in housing prices could lead to many problems — such as financial instability, a widening wealth gap, housing injustice and resource misplacement — which could not be addressed by a single ministry or government agency.
The central bank cannot resolve these problems alone and it requires the coordinated efforts of various ministries and government agencies.
On May 7, 1971, Henry Kissinger planned his first, ultra-secret mission to China and pondered whether it would be better to meet his Chinese interlocutors “in Pakistan where the Pakistanis would tape the meeting — or in China where the Chinese would do the taping.” After a flicker of thought, he decided to have the Chinese do all the tape recording, translating and transcribing. Fortuitously, historians have several thousand pages of verbatim texts of Dr. Kissinger’s negotiations with his Chinese counterparts. Paradoxically, behind the scenes, Chinese stenographers prepared verbatim English language typescripts faster than they could translate and type them
More than 30 years ago when I immigrated to the US, applied for citizenship and took the 100-question civics test, the one part of the naturalization process that left the deepest impression on me was one question on the N-400 form, which asked: “Have you ever been a member of, involved in or in any way associated with any communist or totalitarian party anywhere in the world?” Answering “yes” could lead to the rejection of your application. Some people might try their luck and lie, but if exposed, the consequences could be much worse — a person could be fined,
Xiaomi Corp founder Lei Jun (雷軍) on May 22 made a high-profile announcement, giving online viewers a sneak peek at the company’s first 3-nanometer mobile processor — the Xring O1 chip — and saying it is a breakthrough in China’s chip design history. Although Xiaomi might be capable of designing chips, it lacks the ability to manufacture them. No matter how beautifully planned the blueprints are, if they cannot be mass-produced, they are nothing more than drawings on paper. The truth is that China’s chipmaking efforts are still heavily reliant on the free world — particularly on Taiwan Semiconductor Manufacturing
Keelung Mayor George Hsieh (謝國樑) of the Chinese Nationalist Party (KMT) on Tuesday last week apologized over allegations that the former director of the city’s Civil Affairs Department had illegally accessed citizens’ data to assist the KMT in its campaign to recall Democratic Progressive Party (DPP) councilors. Given the public discontent with opposition lawmakers’ disruptive behavior in the legislature, passage of unconstitutional legislation and slashing of the central government’s budget, civic groups have launched a massive campaign to recall KMT lawmakers. The KMT has tried to fight back by initiating campaigns to recall DPP lawmakers, but the petition documents they
RSS