Recent media reports have stressed the urgency of addressing high property prices, especially in Taipei, where prices have risen so quickly that few in our younger generation are able to purchase a property in the city.
According to an April 16 survey released by the Construction and Planning Agency, the average price-to-income ratio was 15.01 in Taipei in the final quarter of last year and 12.67 for New Taipei City. That means it would take about 15 years of an ordinary family’s income to buy a house in the capital, assuming the family did not eat or drink or spend money on anything but the house and nearly 13 years on average for households in New Taipei City.
The survey also indicates that the Greater Taipei area has become one of the most unaffordable places to buy a property in the nation, as a mortgage accounted for 63.37 percent of household income in Taipei in the fourth quarter of last year and 53.51 percent in New Taipei, while a commonly accepted average is about 30 percent.
The results of the survey have raised eyebrows among government officials, prompting Premier Jiang Yi-huah (江宜樺) to vow to reduce the average price-to-income ratio in the Greater Taipei area to 10 in two years and Taipei Deputy Mayor Chang Chin-oh (張金鶚) to say he wanted to bring down home prices in the capital by 30 percent in two years.
Last week, lawmakers on the legislature’s Finance Committee moved quickly to approve a proposal to raise taxes on homes that owners do not live in to between 1.5 percent and 3.6 percent, from the current range of between 1.2 percent and 2 percent. Implementation of the new rates could take effect as soon as May next year, if the proposed amendment to the House Tax Act (房屋稅條例) clears the legislative floor this year.
Unfortunately, such a tax hike would only have a limited impact on the housing market, because the housing taxes are based on the government-set “current assessed housing value,” which is often much lower than the market value. Based on the Ministry of Finance’s estimates, the new policy might just increase the tax burden for each household by an average of NT$4,050 a year. Even though the number could reach as high as NT$120,000 for luxury housing in Taipei’s upscale Xinyi District (信義), it will not bother luxury housing buyers and investors with deep pockets.
Jiang’s wish to see average price-to-income ratio drop to 10 also looks difficult to achieve, because that would require either a tumble of more than 30 percent in house prices or household income to increase by 50 percent, according to estimates by the Taipei Association of Real Estate Brokers.
Actually, prices are unlikely to drop 30 percent in the next couple of years as long as the imbalance of supply and demand remains in Taipei, and if the conditions of low interest rates and still-strong market liquidity continue. However even if prices do drop by that much, it would invite concern that the banks could withstand such a crisis. Moreover, as real-term salaries have not returned to their level of 15 years ago, it is highly unlikely to see household income increase by 50 percent in the next two years.
Without a plan to introduce a property transaction income tax, or a capital gains tax on the sale of land and houses based on market value and if interest rates remain low, it is impossible to bring down housing prices or lure money away from the housing market into other segments of the economy. As such, government actions are just a reminder that we still have a long way to go to achieve housing justice in this nation.
Labubu, an elf-like plush toy with pointy ears and nine serrated teeth, has become a global sensation, worn by celebrities including Rihanna and Dua Lipa. These dolls are sold out in stores from Singapore to London; a human-sized version recently fetched a whopping US$150,000 at an auction in Beijing. With all the social media buzz, it is worth asking if we are witnessing the rise of a new-age collectible, or whether Labubu is a mere fad destined to fade. Investors certainly want to know. Pop Mart International Group Ltd, the Chinese manufacturer behind this trendy toy, has rallied 178 percent
My youngest son attends a university in Taipei. Throughout the past two years, whenever I have brought him his luggage or picked him up for the end of a semester or the start of a break, I have stayed at a hotel near his campus. In doing so, I have noticed a strange phenomenon: The hotel’s TV contained an unusual number of Chinese channels, filled with accents that would make a person feel as if they are in China. It is quite exhausting. A few days ago, while staying in the hotel, I found that of the 50 available TV channels,
Kinmen County’s political geography is provocative in and of itself. A pair of islets running up abreast the Chinese mainland, just 20 minutes by ferry from the Chinese city of Xiamen, Kinmen remains under the Taiwanese government’s control, after China’s failed invasion attempt in 1949. The provocative nature of Kinmen’s existence, along with the Matsu Islands off the coast of China’s Fuzhou City, has led to no shortage of outrageous takes and analyses in foreign media either fearmongering of a Chinese invasion or using these accidents of history to somehow understand Taiwan. Every few months a foreign reporter goes to
There is no such thing as a “silicon shield.” This trope has gained traction in the world of Taiwanese news, likely with the best intentions. Anything that breaks the China-controlled narrative that Taiwan is doomed to be conquered is welcome, but after observing its rise in recent months, I now believe that the “silicon shield” is a myth — one that is ultimately working against Taiwan. The basic silicon shield idea is that the world, particularly the US, would rush to defend Taiwan against a Chinese invasion because they do not want Beijing to seize the nation’s vital and unique chip industry. However,
RSS