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
The US Department of Defense recently released this year’s “Report on Military and Security Developments Involving the People’s Republic of China.” This annual report provides a comprehensive overview of China’s military capabilities, strategic objectives and evolving global ambitions. Taiwan features prominently in this year’s report, as capturing the nation remains central to Chinese President Xi Jinping’s (習近平) vision of the “great rejuvenation of the Chinese nation,” a goal he has set for 2049. The report underscores Taiwan’s critical role in China’s long-term strategy, highlighting its significance as a geopolitical flashpoint and a key target in China’s quest to assert dominance
The National Development Council (NDC) on Wednesday last week launched a six-month “digital nomad visitor visa” program, the Central News Agency (CNA) reported on Monday. The new visa is for foreign nationals from Taiwan’s list of visa-exempt countries who meet financial eligibility criteria and provide proof of work contracts, but it is not clear how it differs from other visitor visas for nationals of those countries, CNA wrote. The NDC last year said that it hoped to attract 100,000 “digital nomads,” according to the report. Interest in working remotely from abroad has significantly increased in recent years following improvements in
Monday was the 37th anniversary of former president Chiang Ching-kuo’s (蔣經國) death. Chiang — a son of former president Chiang Kai-shek (蔣介石), who had implemented party-state rule and martial law in Taiwan — has a complicated legacy. Whether one looks at his time in power in a positive or negative light depends very much on who they are, and what their relationship with the Chinese Nationalist Party (KMT) is. Although toward the end of his life Chiang Ching-kuo lifted martial law and steered Taiwan onto the path of democratization, these changes were forced upon him by internal and external pressures,
Chinese Nationalist Party (KMT) caucus whip Fu Kun-chi (傅?萁) has caused havoc with his attempts to overturn the democratic and constitutional order in the legislature. If we look at this devolution from the context of a transition to democracy from authoritarianism in a culturally Chinese sense — that of zhonghua (中華) — then we are playing witness to a servile spirit from a millennia-old form of totalitarianism that is intent on damaging the nation’s hard-won democracy. This servile spirit is ingrained in Chinese culture. About a century ago, Chinese satirist and author Lu Xun (魯迅) saw through the servile nature of
RSS