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.
Two weeks ago, Malaysian actress Michelle Yeoh (楊紫瓊) raised hackles in Taiwan by posting to her 2.6 million Instagram followers that she was visiting “Taipei, China.” Yeoh’s post continues a long-standing trend of Chinese propaganda that spreads disinformation about Taiwan’s political status and geography, aimed at deceiving the world into supporting its illegitimate claims to Taiwan, which is not and has never been part of China. Taiwan must respond to this blatant act of cognitive warfare. Failure to respond merely cedes ground to China to continue its efforts to conquer Taiwan in the global consciousness to justify an invasion. Taiwan’s government
“If you do not work in semiconductors, you are nothing in this country.” That is what an 18-year-old told me after my speech at the Kaohsiung International Youth Forum. It was a heartbreaking comment — one that highlights how Taiwan ignores the potential of the creative industry and the soft power that it generates. We all know what an Asian nation can achieve in that field. Japan led the way decades ago. South Korea followed with the enormous success of “hallyu” — also known as the Korean wave, referring to the global rise and spread of South Korean culture. Now Thailand
This month’s news that Taiwan ranks as Asia’s happiest place according to this year’s World Happiness Report deserves both celebration and reflection. Moving up from 31st to 27th globally and surpassing Singapore as Asia’s happiness leader is gratifying, but the true significance lies deeper than these statistics. As a society at the crossroads of Eastern tradition and Western influence, Taiwan embodies a distinctive approach to happiness worth examining more closely. The report highlights Taiwan’s exceptional habit of sharing meals — 10.1 shared meals out of 14 weekly opportunities, ranking eighth globally. This practice is not merely about food, but represents something more
In an article published on this page on Tuesday, Kaohsiung-based journalist Julien Oeuillet wrote that “legions of people worldwide would care if a disaster occurred in South Korea or Japan, but the same people would not bat an eyelid if Taiwan disappeared.” That is quite a statement. We are constantly reading about the importance of Taiwan Semiconductor Manufacturing Co (TSMC), hailed in Taiwan as the nation’s “silicon shield” protecting it from hostile foreign forces such as the Chinese Communist Party (CCP), and so crucial to the global supply chain for semiconductors that its loss would cost the global economy US$1
RSS