Greater Taipei housing market shows signs
May 8, 2014, 12:02 am TWN
TAIPEI -- Finance Minister Chang Sheng-ford revealed figures Wednesday that indicate the soaring home prices of the greater Taipei area may have finally begun to dip.
Chang, who pledged in late April to tackle high housing prices, showed numbers from state-owned banks to the Legislature's Finance Committee.
Prices in Taipei have "dropped around 5 percent," and those in New Taipei have dropped "less than 5 percent," he said, though he did not specify a basis of comparison.
The numbers are a positive sign of a cool-down in the market that will discourage people from speculation, according to Chang.
Taipei's housing price-to-income ratio is notoriously high. Official statistics put the number at 15, meaning it would take the average Taipei resident to save 15 years of every penny earned to buy a home.
Taiwan's price-to-rent ratio has also been consistently named as one of the world's highest.
But despite the drop shown in the numbers, Chang said he does not expect the housing market to go bust because the decline has come at a slow rate.
The minister also explained new regulations according to a draft approved by the Finance Committee last month that will raise the tax on non-owner-occupied homes from 1.2 percent to 1.5 percent.
Homes registered under the name of an individual's direct blood relative will be considered owner-occupied, meaning they will not be subject to tax hikes.
If a husband and wife each own their own home before marriage, the home left unoccupied by the couple can still be deemed owner-occupied only if a direct blood relative takes up residency there, he said.