Real-estate prices have continued to go through the roof, as the property market remains bullish. Statistics released by the Ministry of the Interior showed that 3.15 million properties exchanged hands last year, rising by 21,605, or 6.62 percent, from the previous year, prompting the ministry to introduce amendments to crack down on speculation.
Investing in the housing market has become just a dream, because selling property can be heartrending, and anyone currently sitting on a property, using it as their home and waiting for a time when prices would rise to sell it would be waiting for a long time, Cushman & Wakefield Taiwan general manager Billy Yen (顏炳立) has said.
I could not agree more with this assessment: The following two metrics suggest that we are sitting in a housing bubble that could burst at any time.
First, for the past two years, mortgages accounted for more than 40 percent of GDP — a ratio internationally recognized as a warning sign of a housing bubble.
Data from the central bank and the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed that in December 2020, home mortgages totaled more than NT$8 trillion (US$286.8 billion at the current exchange rate), which was 40.64 percent of that year’s GDP of about NT$19.8 trillion.
Adding in construction loans of just under NT$2.5 trillion would raise the total amount of loans to about NT$10.5 trillion, accounting for 53.07 percent of GDP.
Despite the central bank’s implementation of selective credit-control measures, home mortgages climbed to more than NT$8.8 trillion in December last year, accounting for 40.66 percent of that year’s GDP of NT$21.65 trillion.
Again, adding in construction loans of more than NT$2.8 trillion, total loans would be NT$11.6 trillion, or 53.63 percent of GDP.
Central bank Governor Yang Chin-long’s (楊金龍) concern over surging property loans is understandable, including why he decided to expand selective credit controls.
The second factor is housing supply continues to rise, while the population is falling. A DGBAS population and housing survey for 2020 showed a record number of vacant homes of 1.66 million.
Ministry figures showed that 104,872 residential building permits and 170,465 construction permits were issued last year for a total of 275,337. If this is multiplied by the average of 2.88 people per family, as per the ministry’s calculations, the new housings could accommodate more than 792,000 people. This figure does not even include the 98,260 housing permits issued in 2020.
When the population is falling and there is a housing surplus, what is left is a housing bubble.
The housing market has had its ups and downs: In the late 1980s, when the stock market was booming, housing prices soared. However, when the housing market collapsed in the late 1990s, homeowners were left unable to pay their mortgages, leading to a massive number of properties being placed under the hammer for horribly low bids.
My house in Nantou County is next to a congregate housing complex built in the 1990s, when it sold for NT$100,000 per ping (3.3m2); in the early 2000s, a considerable number of these properties were put up for auction, fetching only NT$30,000 per ping.
This should come as a warning for anyone thinking of purchasing a house in the current climate.
Wang Juei-hsing is a former head of the Taiwan Provincial Government’s Land Development Division.
Translated by Paul Cooper
When Chinese President Xi Jinping (習近平) sits down with US President Donald Trump in Beijing on Thursday next week, Xi is unlikely to demand a dramatic public betrayal of Taiwan. He does not need to. Beijing’s preferred victory is smaller, quieter and in some ways far more dangerous: a subtle shift in American wording that appears technical, but carries major strategic meaning. The ask is simple: replace the longstanding US formulation that Washington “does not support Taiwan independence” with a harder one — that Washington “opposes” Taiwan independence. One word changes; a deterrence structure built over decades begins to shift.
Taipei is facing a severe rat infestation, and the city government is reportedly considering large-scale use of rodenticides as its primary control measure. However, this move could trigger an ecological disaster, including mass deaths of birds of prey. In the past, black kites, relatives of eagles, took more than three decades to return to the skies above the Taipei Basin. Taiwan’s black kite population was nearly wiped out by the combined effects of habitat destruction, pesticides and rodenticides. By 1992, fewer than 200 black kites remained on the island. Fortunately, thanks to more than 30 years of collective effort to preserve their remaining
After Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) met Chinese President Xi Jinping (習近平) in Beijing, most headlines referred to her as the leader of the opposition in Taiwan. Is she really, though? Being the chairwoman of the KMT does not automatically translate into being the leader of the opposition in the sense that most foreign readers would understand it. “Leader of the opposition” is a very British term. It applies to the Westminster system of parliamentary democracy, and to some extent, to other democracies. If you look at the UK right now, Conservative Party head Kemi Badenoch is
A Pale View of Hills, a movie released last year, follows the story of a Japanese woman from Nagasaki who moved to Britain in the 1950s with her British husband and daughter from a previous marriage. The daughter was born at a time when memories of the US atomic bombing of Nagasaki during World War II and anxiety over the effects of nuclear radiation still haunted the community. It is a reflection on the legacy of the local and national trauma of the bombing that ended the period of Japanese militarism. A central theme of the movie is the need, at
RSS