As global central banks embark on aggressive monetary easing to revive economies hit by the COVID-19 pandemic, the low interest rates and ample liquidity have lifted housing prices and transaction volume in the past few months, and Taiwan is no exception.
Deputy Minister of the Interior Hua Ching-chun (花敬群) on Friday said that some speculative activities appear to have taken hold in the property market and various ministries have discussed policies to curb property speculation — such as selective credit controls by the central bank, property tax reforms by the Ministry of Finance and restrictions on purchasing by the Ministry of the Interior.
Is Taiwan at risk of experiencing a property bubble? The release on Thursday of the minutes of the central bank’s latest quarterly policymaking meeting shed some light on the issue.
Several central bank board directors addressed the problems in the domestic housing market during the Sept. 17 meeting, with one saying that the bank needs to pay attention to the signs of a property bubble and draw up necessary measures.
Another suggested that the bank act pre-emptively before people develop unrealistic expectations for the housing market, while another urged a coordinated effort by the central bank, ministries and local governments to tackle problems in the housing market.
National Development Council Minister Kung Ming-hsin (龔明鑫) on Oct. 21 said that the council is considering creating a business climate index to monitor changes in the housing market to help policymakers better grasp the market’s pulse.
The government is obviously keeping an eye on rising housing prices, as the issue has become politicized over the past few years. Since 2010, the issues of curbing housing prices or increasing the supply of social housing have become key topics during each major election, along with other problems such as a widening income gap and low housing affordability.
The median housing price to median annual household income ratio in Taiwan was 8.6 in the first quarter of this year, interior ministry data showed. This means a person would need to save their entire income for almost nine years without eating or drinking to be able to buy a home.
The average household in Taiwan also spent 35.3 percent of its income on mortgage payments in the first quarter, up 0.15 percent from the previous quarter and higher than the generally acceptable limit of 30 percent, the data showed.
Nevertheless, Taiwanese, especially the wealthy, consider real estate a good investment amid the government’s pro-market housing policies, as relatively low property and transaction taxes attract buyers.
Academia Sinica member and former representative to the WTO Cyrus Chu (朱敬一) in a speech on Oct. 23 said that profiting from real-estate investment is particularly attractive to rich Taiwanese, as it has become a fast way to accumulate wealth, albeit with serious side effects, such as increased social inequality and a growing income gap that has widened over the past 10 years.
The top 1 percent in Taiwan earned 11.29 percent of all income in 2017, thanks to capital gains from the stock and housing markets, Chu said, citing data collected by the Fiscal Information Agency.
The figure is expected to continue rising in the long term, he said, meaning that the top 1 percent would likely accumulate more wealth faster than all other income brackets.
A spate of housing and land tax reforms implemented in the past few years are far from perfect and allow tax evasion.
The government must tackle housing inequality seriously and continue with tax reforms, or the income gap and social discontent will only intensify.
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
The past few months have seen tremendous strides in India’s journey to develop a vibrant semiconductor and electronics ecosystem. The nation’s established prowess in information technology (IT) has earned it much-needed revenue and prestige across the globe. Now, through the convergence of engineering talent, supportive government policies, an expanding market and technologically adaptive entrepreneurship, India is striving to become part of global electronics and semiconductor supply chains. Indian Prime Minister Narendra Modi’s Vision of “Make in India” and “Design in India” has been the guiding force behind the government’s incentive schemes that span skilling, design, fabrication, assembly, testing and packaging, and
Can US dialogue and cooperation with the communist dictatorship in Beijing help avert a Taiwan Strait crisis? Or is US President Joe Biden playing into Chinese President Xi Jinping’s (習近平) hands? With America preoccupied with the wars in Europe and the Middle East, Biden is seeking better relations with Xi’s regime. The goal is to responsibly manage US-China competition and prevent unintended conflict, thereby hoping to create greater space for the two countries to work together in areas where their interests align. The existing wars have already stretched US military resources thin, and the last thing Biden wants is yet another war.