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Taiwan public lament high cost of homes
Source: Xinhua |
March 29, 2010, Monday
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HALF a year's pay for 1 square meter: That's the math for Taipei-based Soochow University graduate Miss Lai.
With a monthly income of more than NT$20,000 (US$625), Lai says, "I can achieve the 1-square-meter goal if I don't spend a penny."
Apartments in urban Taipei were selling for an average NT$138,000 per square meter by the end of last year, up about 26 percent year on year and equal with prices before the global financial crisis of 2008, according to the island's property authority.
New apartments sold at more than NT$150,000 per square meter in March.
A survey of 100 employees in a major company by Lin Shu-Ping, an associate professor of Taiwan's Tamkang University, showed most listed house prices as their biggest source of stress.
Professor Chang Chin-Oh, a real estate expert with Taipei-based Chengchi University, warned of possible bubble in the real estate sector.
Chang, a specialist with the university's Land Economics Department, said free-flowing capital is the major driver of rocketing prices.
Influx of funds
"The Taiwan authority's easing of monetary policy amid the economic downturn has increased capital flow dramatically," he said.
The problem is compounded by Taiwan business people remitting money from the Chinese mainland, and overseas capital flowing back after the Taiwan authority cut the inheritance tax rate, said Chang.
He said mainland capital has played only a minor role in the island's real estate sector.
The Taiwan authority has approved only 10 real estate projects with investment from the mainland since 2002, involving about NT$18 million in total, according to Chang.
"An indiscriminate tax system that takes no account of first homes and an opaque information disclosure system in the real estate sector also provide great room for speculation," he says.
A university professor with a monthly salary of around NT$100,000, Chang would have to save 20 years without spending a penny to buy an apartment in Taipei."I can't afford an apartment at the moment."
Responding to public discontent, the Taiwan authority is mulling measures to rein in prices, including a tax on luxury home purchases, and different tax rates for first and second homes.
Most banks on the island have already cut the ratio of mortgages to total loans from 80 percent to 70 percent, and raised interest rates by 1 to 2 percentage points.
With a monthly income of more than NT$20,000 (US$625), Lai says, "I can achieve the 1-square-meter goal if I don't spend a penny."
Apartments in urban Taipei were selling for an average NT$138,000 per square meter by the end of last year, up about 26 percent year on year and equal with prices before the global financial crisis of 2008, according to the island's property authority.
New apartments sold at more than NT$150,000 per square meter in March.
A survey of 100 employees in a major company by Lin Shu-Ping, an associate professor of Taiwan's Tamkang University, showed most listed house prices as their biggest source of stress.
Professor Chang Chin-Oh, a real estate expert with Taipei-based Chengchi University, warned of possible bubble in the real estate sector.
Chang, a specialist with the university's Land Economics Department, said free-flowing capital is the major driver of rocketing prices.
Influx of funds
"The Taiwan authority's easing of monetary policy amid the economic downturn has increased capital flow dramatically," he said.
The problem is compounded by Taiwan business people remitting money from the Chinese mainland, and overseas capital flowing back after the Taiwan authority cut the inheritance tax rate, said Chang.
He said mainland capital has played only a minor role in the island's real estate sector.
The Taiwan authority has approved only 10 real estate projects with investment from the mainland since 2002, involving about NT$18 million in total, according to Chang.
"An indiscriminate tax system that takes no account of first homes and an opaque information disclosure system in the real estate sector also provide great room for speculation," he says.
A university professor with a monthly salary of around NT$100,000, Chang would have to save 20 years without spending a penny to buy an apartment in Taipei."I can't afford an apartment at the moment."
Responding to public discontent, the Taiwan authority is mulling measures to rein in prices, including a tax on luxury home purchases, and different tax rates for first and second homes.
Most banks on the island have already cut the ratio of mortgages to total loans from 80 percent to 70 percent, and raised interest rates by 1 to 2 percentage points.
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