Taiwan Housing

Written By: Song Yen Hsun

Overview

The price of house in Taiwan rise in a extremely speed in these years. Young people who just started to work found it’s almost impossible for them to have their own house in this kind of price level. According to some investigations, people in Taiwan now have to save money without eating anything for 16 years in order to by their own house. Though this may be a little bit too exaggerate from the reality, it still shows the housing price problem in Taiwan now.

Reasons for Rising Housing Prices

Usually the price of house will keep rising because of the population still increase in a high speed and the acreage of land maintains the same. So every country all has to face their problem on the price issues. But the housing problem in Taiwan is very complicated as a result of the inappropriate invests and it started to go out of control.


1) The inappropriate investment
First, the investors created a weird situation called “false demand”, in this situation the demand of houses seems very large than the supply, so the price rise in a high speed within a short period. But the true condition is most of the houses which were in the real estate market are out of use, they just became a kind of goods. 


Real estate investors use their huge capital to buy lots of house and just wait their price to go up after years, than they re-sell the houses at a much higher price. They use this method to earn lots of money in a short time. Actually they didn’t do anything to increase the value of the house, what they only do is spend their money and own the houses for few years to wait for the right moment to resale it again. The result of this is the demand of house seems to be very large due to the investors’ purchasing in the market. But do this house really in used? The answer is no! People who really need to live in this house can’t afford the high price of it, and the people who make the high demand of house don’t live in it.


2) The hot money from China
Second, the hot money from mainland China started to affect the real estate market in Taiwan after the agreement of ECFA and MOE. They used their money to join the trades of houses in Taiwan, which makes the speed of price increasing much more higher than it should be. Although they own the houses, but they don’t live in it just like the investors in Taiwan. The influence of this kind of hot money started to become more and more powerful these years with the highly improvement of China’s economic.


These two reasons lead to the extremely high price of houses in Taiwan.

Related Housing Policies in Taiwan

The government didn’t want to affect the price of houses in Taiwan at first. But after the price started to go out of control, experts in real estate invoked that government should take some actions to stop or slower the speed it rising.


1) Luxury Tax
The government passed a policy related to the real estate market which is called the “luxury tax”. This tax policy charges the investors for a high proportion for 15% of the deal price if the seller owns the house less than one year, 10% for less than two years. Government plans to slower the speed of price increase through decline the inappropriate trades in the market.

2) Other Policies