Young adults in Taipei have faced major economic barriers in buying their own home in recent years, their stagnant incomes unable to keep up with soaring home prices driven ever higher by investors looking for a place to park their funds.
However, a recent survey by local real-estate broker H&B Business Group has found that people in Taipei buy their first home at the age of 39, two to three years younger than their peers in metropolitan areas of Japan and Germany.
That finding defies logic because, according to Construction and Planning Agency Director-General Yeh Shih-wen (葉世文), the average housing price in Taipei is 14.1 times annual household income, compared with 8.8 times in Japan.
H&B Business Group spokeswoman Jessica Hsu (徐佳馨) said local parents are the great equalizers.
“It is not that these first-time home buyers in Taiwan really make a lot of money, but that the financial help from parents is the key reason why they are able to buy their first home earlier than others,” she said.
A 31-year-old office worker in Taipei who identified himself as Hsuma typifies this phenomenon.
When he bought a unit in a 23-year-old apartment building in Taipei three years ago for NT$7.5 million (US$237,000), his parents contributed between NT$2 million and NT$3 million as a down payment.
“I think it’s almost impossible for young people to buy their own home solely on their own,” he said.
He considers buying an apartment to be better than renting one if one plans to live in a city for a long time and now pays an affordable mortgage of NT$10,000 per month thanks to his parents’ help.
The H&B Business Group survey found, however, that even with the help of parents, Taipei’s relatively high housing prices meant that people in the capital bought their first apartment at a later average age than elsewhere in the country.
First-time home buyers in Taipei were on average 39.4 years old last year (up from 37.1 years of age in 2008), compared with 33 to 35 years old in the metropolitan areas of Taichung and Kaohsiung.
People who are 30 to 34 years of age in Taiwan earn a monthly income of NT$32,787 on average, government figures show.
Because of concerns that housing prices in Taipei have soared to inaccessible levels, and fears of a growing income gap that will make it impossible for some to ever buy property in the capital, the government took measures between March and June to dampen speculation.
According to Stanley Su (蘇啟榮), a senior researcher at Taiwan’s Sinyi Realty Co, there were 3,850 real estate transactions last month, down 24.29 percent from 5,085 transactions a month earlier and the lowest in 18 months.
Su said the decline in the third quarter, normally the low season in real estate, rarely exceeds 15 percent, indicating that the central bank’s measures are taking effect.
However, Hsu questioned how long-lasting the impact of the measures will be.
“We believe that these government measures will only have a short-term cooling effect on housing prices in Taipei,” Hsu said. “We expect housing prices to continue to rise over the long-term and this will make home-buying even more difficult for young people.”
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